$900,000,000.00 CREDIT AGREEMENT Dated as of May 3, 2010 among J. RAY MCDERMOTT, S.A. as the Initial Borrower and MCDERMOTT INTERNATIONAL, INC. as the New Borrower and THE LENDERS AND ISSUERS PARTY HERETO and CRÉDIT AGRICOLE CORPORATE AND INVESTMENTBANK as Administrative Agent, Collateral Agent, Joint Lead Arranger and Joint Bookrunner and BANC OF AMERICA SECURITIES LLC and WELLS FARGO SECURITIES, LLC as Joint Lead Arrangers and Joint Bookrunners and BNP PARIBAS as Syndication Agent and WELLS FARGO BANK, N.A. and BANK OF AMERICA, N.A. and THE BANK OF NOVA SCOTIA and BBVA COMPASS as Co-Documentation Agents TABLE OF CONTENTS

EX-10.1 2 dex101.htm CREDIT AGREEMENT DATED AS OF MAY 3, 2010 Credit Agreement dated as of May 3, 2010

Exhibit 10.1

EXECUTION COPY

$900,000,000.00

CREDIT AGREEMENT

Dated as of May 3, 2010

among

J. RAY MCDERMOTT, S.A.

as the Initial Borrower

and

MCDERMOTT INTERNATIONAL, INC.

as the New Borrower

and

THE LENDERS AND ISSUERS PARTY HERETO

and

CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK

as Administrative Agent, Collateral Agent, Joint Lead Arranger and Joint Bookrunner

and

BANC OF AMERICA SECURITIES LLC

and

WELLS FARGO SECURITIES, LLC

as Joint Lead Arrangers and Joint Bookrunners

and

BNP PARIBAS

as Syndication Agent

and

WELLS FARGO BANK, N.A.

and

BANK OF AMERICA, N.A.

and

THE BANK OF NOVA SCOTIA

and

BBVA COMPASS

as Co-Documentation Agents

TABLE OF CONTENTS


		Page
ARTICLE I Definitions, Interpretation And Accounting Terms		1

Section 1.1	Defined Terms	1

Section 1.2	Computation of Time Periods	39

Section 1.3	Accounting Terms and Principles	39

Section 1.4	Certain Terms	40

ARTICLE II The Loans and Letters of Credit		41

Section 2.1	The Revolving Commitments	41

Section 2.2	Borrowing Procedures	41

Section 2.3	Swing Loans	42

Section 2.4	Letters of Credit	44

Section 2.5	Reduction and Termination of the Revolving Commitments	51

Section 2.6	Repayment of Loans	51

Section 2.7	Evidence of Debt	52

Section 2.8	Optional Prepayments	52

Section 2.9	Mandatory Prepayments	53

Section 2.10	Interest	53

Section 2.11	Conversion/Continuation Option	54

Section 2.12	Fees	55

Section 2.13	Payments and Computations	56

Section 2.14	Special Provisions Governing Eurodollar Rate Loans	59

Section 2.15	Capital Adequacy	61

Section 2.16	Taxes	62

Section 2.17	Substitution of Lenders	65

Section 2.18	Incremental Revolving Commitments	66

Section 2.19	Cash Collateral	67

Section 2.20	Defaulting Lenders	68

ARTICLE III Conditions To Loans And Letters Of Credit		71

Section 3.1	Conditions Precedent to Effectiveness	71

Section 3.2	Conditions Precedent to Each Loan and Letter of Credit	75

TABLE OF CONTENTS

(CONTINUED)


		Page
Section 3.3	Determinations of Initial Borrowing Conditions	75

ARTICLE IV Representations and Warranties		76

Section 4.1	Corporate Existence; Compliance with Law	76

Section 4.2	Corporate Power; Authorization; Enforceable Obligations	76

Section 4.3	Ownership of Borrowers; Subsidiaries	77

Section 4.4	Financial Statements	79

Section 4.5	Material Adverse Effect	79

Section 4.6	Solvency	79

Section 4.7	Litigation	79

Section 4.8	Taxes	80

Section 4.9	Full Disclosure	80

Section 4.10	Margin Regulations	80

Section 4.11	No Burdensome Restrictions; No Defaults	80

Section 4.12	Investment Company Act	81

Section 4.13	Use of Proceeds	81

Section 4.14	Insurance	81

Section 4.15	Labor Matters	81

Section 4.16	ERISA	82

Section 4.17	Environmental Matters	83

Section 4.18	Intellectual Property	83

Section 4.19	Title; Real Property	84

Section 4.20	Mortgaged Vessels	85

ARTICLE V Financial Covenants		86

Section 5.1	Maximum Leverage Ratio	86

Section 5.2	Minimum Interest Coverage Ratio	86

ARTICLE VI Reporting Covenants		86

Section 6.1	Financial Statements	86

Section 6.2	Collateral Reporting Requirements	87

Section 6.3	Default Notices	89

Section 6.4	Litigation	89

Section 6.5	Labor Relations	89

TABLE OF CONTENTS

(CONTINUED)


		Page
Section 6.6	Tax Returns	90

Section 6.7	Insurance	90

Section 6.8	ERISA Matters	90

Section 6.9	Environmental Matters	91

Section 6.10	Patriot Act Information	91

Section 6.11	Other Information	92

Section 6.12	Existing Babcock Guaranties	92

ARTICLE VII Affirmative Covenants		92

Section 7.1	Preservation of Corporate Existence, Etc	92

Section 7.2	Compliance with Laws, Etc	92

Section 7.3	Conduct of Business	93

Section 7.4	Payment of Taxes, Etc	93

Section 7.5	Maintenance of Insurance	93

Section 7.6	Access	94

Section 7.7	Keeping of Books	94

Section 7.8	Maintenance of Properties, Etc	94

Section 7.9	Application of Proceeds	94

Section 7.10	Environmental	94

Section 7.11	Additional Collateral and Guaranties; Collateral Fall-away	97

Section 7.12	Real Property	98

Section 7.13	Ratings	99

Section 7.14	Cancellation of Existing Babcock Guaranties	99

Section 7.15	Post-Closing Covenants	99

ARTICLE VIII Negative Covenants		102

Section 8.1	Indebtedness	102

Section 8.2	Liens, Etc	104

Section 8.3	Acquisitions	106

Section 8.4	Sale of Assets	106

Section 8.5	Restricted Payments	108

Section 8.6	Restriction on Fundamental Changes	110

Section 8.7	Change in Nature of Business	110

iii

TABLE OF CONTENTS

(CONTINUED)


		Page
Section 8.8	Transactions with Affiliates	110

Section 8.9	Restrictions on Subsidiary Distributions; No New Negative Pledge	111

Section 8.10	Modification of Constituent Documents	111

Section 8.11	Accounting Changes; Fiscal Year	111

Section 8.12	Margin Regulations	111

Section 8.13	Sale/Leasebacks	112

Section 8.14	Capital Expenditures	112

Section 8.15	Cancellation of Indebtedness Owed to It	112

Section 8.16	No Speculative Transactions	112

Section 8.17	Post-Termination Benefits	112

Section 8.18	Activities in Panama	113

Section 8.19	Terms of Spin	113

Section 8.20	Vessel Flags	113

Section 8.21	Existing Babcock Guaranties	114

ARTICLE IX Events of Default		114

Section 9.1	Events of Default	114

Section 9.2	Remedies	116

Section 9.3	Actions in Respect of Letters of Credit	116

ARTICLE X The Administrative Agent and Other Agents		117

Section 10.1	Authorization and Action	117

Section 10.2	Administrative Agent’s Reliance, Etc	118

Section 10.3	The Agents Individually	119

Section 10.4	Lender Credit Decision	119

Section 10.5	Indemnification	119

Section 10.6	Successor Agents	120

Section 10.7	Concerning the Collateral and the Collateral Documents	122

Section 10.8	Collateral Matters Relating to Related Obligations	123

Section 10.9	Other Agents	124

ARTICLE XI Miscellaneous		124

Section 11.1	Amendments, Waivers, Etc	124

Section 11.2	Assignments and Participations	127

TABLE OF CONTENTS

(CONTINUED)


		Page
Section 11.3	Costs and Expenses	131

Section 11.4	Indemnities	133

Section 11.5	Limitation of Liability	135

Section 11.6	Right of Set-off	135

Section 11.7	Sharing of Payments, Etc	136

Section 11.8	Notices, Etc	137

Section 11.9	No Waiver; Remedies	138

Section 11.10	Binding Effect	139

Section 11.11	Governing Law	139

Section 11.12	Submission to Jurisdiction; Service of Process	139

Section 11.13	Waiver of Jury Trial	140

Section 11.14	Marshaling; Payments Set Aside	140

Section 11.15	Section Titles	140

Section 11.16	Execution in Counterparts	140

Section 11.17	Entire Agreement	140

Section 11.18	Confidentiality	141

Section 11.19	Judgment Currency	141

Section 11.20	Severability	142

Section 11.21	Assumption of New Borrower	142

Schedules


Schedule I	-	Revolving Commitments
Schedule II	-	Applicable Commitment Fee Rate
		and Applicable Margin
Schedule III	-	Guarantors
Schedule IV	-	Letter of Credit Issuer
		Commitments
Schedule V	-	Transferred Joint Ventures
Schedule VI	-	Transferred Subsidiaries
Schedule VII	-	Unrestricted Subsidiaries
Schedule VIII	-	Performance Letters of Credit
Schedule 1.1	-	Joint Ventures
Schedule 2.4	-	Existing Letters of Credit
Schedule 4.2	-	Consents
Schedule 4.3(a)	-	Effective Date Ownership of
		Subsidiaries
Schedule 4.3(b)	-	Post-Spin Ownership of
		Subsidiaries

TABLE OF CONTENTS

(CONTINUED)


	Schedule 4.7	-	Litigation
	Schedule 4.15	-	Labor Matters
	Schedule 4.16	-	ERISA
	Schedule 4.17	-	Environmental Matters
	Schedule 4.19(a)	-	Real Property
	Schedule 4.19(b)	-	Mortgaged Properties
	Schedule 8.1	-	Existing Indebtedness
	Schedule 8.2	-	Existing Liens
	Schedule 8.5	-	Existing Investments
	Schedule 8.8	-	Affiliate Agreements
	Schedule 8.20	-	Permitted Flags
Exhibits
	Exhibit A	-	Form of Assignment and
			Acceptance
	Exhibit B	-	Form of Promissory Note
	Exhibit C	-	Form of Notice of Borrowing
	Exhibit D	-	Form of Swing Loan Request
	Exhibit E	-	Form of Letter of Credit Request
	Exhibit F	-	Form of Notice of Conversion or
			Continuation
	Exhibit G	-	Global Intercompany Note
	Exhibit H	-	Form of Compliance Certificate
	Exhibit I	-	Form of Landlord Lien Waiver
	Exhibit J	-	Effective Date Certificate

This Credit Agreement dated as of May 3, 2010 is among J. Ray McDermott, S.A., a Panamanian corporation (the “Initial Borrower”), McDermott International, Inc., a Panamanian corporation (the “New Borrower”), the Lenders (as defined below), the Issuers (as defined below), and Crédit Agricole Corporate and Investment Bank (“CA CIB”), as administrative agent for the Lenders and the Issuers (in such capacity, and together with its successors pursuant to Section 10.6(a) (Successor Agents)), the “Administrative Agent”) and collateral agent for the Lenders and the Issuers (in such capacity, and together with its successors pursuant to Section 10.6(b) (Successor Agents), the “Collateral Agent”).

The parties to this Credit Agreement agree as follows:

ARTICLE I

DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS

Section 1.1 Defined Terms

As used in this Agreement, the following terms have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

“2006 Credit Agreement” means the Credit Agreement dated as of June 6, 2006 (as amended, supplemented or otherwise modified) among the Initial Borrower, Credit Suisse, Cayman Islands Branch, as administrative agent and collateral agent, and the lenders and other agents party thereto.

“Acquisition” means, with respect to any Person, any transaction, or series of related transactions, consummated on or after the date of this Agreement, by which such Person (a) acquires any ongoing business or all or substantially all of the assets of any Person or group of Persons, or division thereof constituting an ongoing business, whether through purchase of assets, merger or otherwise or (b) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number of votes) of the securities of a corporation which have ordinary voting power for the election of directors (other than securities having such power only by reason of the happening of a contingency) or a majority (by percentage or voting power) of the outstanding ownership interests of a partnership, limited liability company, or other entity that is not a corporation constituting an ongoing business; provided, however, that any acquisition of assets, equity securities or ownership interests of a Person that is a Subsidiary of such Person prior to such acquisition shall not constitute an “Acquisition” hereunder.

“Administrative Agent” has the meaning specified in the preamble to this Agreement.

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

“Affected Lender” has the meaning specified in Section 2.17 (Substitution of Lenders).

“Affiliate” means, with respect to any Person, any other Person, directly or indirectly, controlling or that is controlled by or is under common control with such Person, each officer, director or general partner of such Person, and each Person that is the beneficial owner of 10% or more of any class of Voting Stock of such Person. For the purposes of this definition, “control” means the possession of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

“Affiliate Agreements” means, collectively, the agreements listed on Schedule 8.8 hereto.

“Agents” means the Administrative Agent, the Collateral Agent, the Co-Documentation Agents and the Syndication Agent.

“Agreement” means this Credit Agreement, dated as of May 3, 2010, as it may be amended, restated, supplemented or otherwise modified from time to time.

“Alternative Currency” means any lawful currency (other than Dollars) of any of the G-20 Countries (or any other currency acceptable to the Administrative Agent in its sole discretion).

“Applicable Commitment Fee Rate” has the meaning specified in Schedule II.

“Applicable Lending Office” means, with respect to each Lender, its Domestic Lending Office in the case of a Base Rate Loan, and its Eurodollar Lending Office in the case of a Eurodollar Rate Loan.

“Applicable Margin” has the meaning specified in Schedule II.

“Approved Fund” means any Fund that is advised or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or Affiliate of an entity that administers or manages a Lender.

“Asset Sale” has the meaning specified in Section 8.4 (Sale of Assets).

“Assignment and Acceptance” means an assignment and acceptance entered into by a Lender and an Eligible Assignee, and accepted by the Administrative Agent, in substantially the form of Exhibit A (Form of Assignment and Acceptance) or any other form approved by the Administrative Agent.

“Authorized Officer” means any Responsible Officer or any other Person designated as an “Authorized Officer” of a Loan Party by prior written notice from such Loan Party to the Administrative Agent.

“Available Credit” means, at any time, an amount equal to (a) the aggregate then effective Revolving Commitments minus (b) the aggregate Outstandings at such time.

“Babcock” means The Babcock & Wilcox Company, a Delaware corporation.

“Babcock Entities” means Babcock and each Person that is anticipated to be a Subsidiary of Babcock after the Spin.

“Base Rate” means, for any period, a fluctuating interest rate per annum as shall be in effect from time to time, which rate per annum shall be equal to the greatest of the following:

(a) the Prime Rate then in effect;

(b) 0.5% per annum plus the Federal Funds Rate then in effect; and

If the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Federal Funds Rate or the Eurodollar Rate for any reason, including the inability of the Administrative Agent to obtain sufficient quotations in accordance with the terms of the definition thereof, the “Base Rate” shall be determined without regard to clause (b) or (c), as applicable above until the circumstances giving rise to such inability no longer exist. Any change in the Base Rate due to a change in the Eurodollar Rate, the Federal Funds Rate or the Prime Rate shall be effective on the effective date of such change in the Eurodollar Rate, the Federal Funds Rate or the Prime Rate, respectively.

“Base Rate Loan” means any Loan during any period in which it bears interest based on the Base Rate.

“Borrower” means (a) until the effective time of the Spin, the Initial Borrower and (b) immediately after the effective time of the Spin and thereafter, the New Borrower.

“Borrower’s Accountants” means the Borrower’s accountants, which shall be Deloitte & Touche LLP or another firm of independent nationally recognized public accountants.

“Borrowing” means a borrowing consisting of Revolving Loans made or to be made on the same day by the Lenders ratably according to their respective Revolving Commitments.

“Business Day” means a day of the year on which banks are not required or authorized to close in New York City and, if the applicable Business Day relates to notices, determinations, fundings and payments in connection with the Eurodollar Rate or

any Eurodollar Rate Loans, a day on which dealings in Dollar deposits are also carried on in the London interbank market.

“CA CIB” has the meaning specified in the preamble to this Agreement.

“Capital Expenditures” means, with respect to any Person for any period:

(a) the aggregate of amounts that would be reflected as additions to property, plant or equipment on a consolidated balance sheet of such Person and its Restricted Subsidiaries prepared in conformity with GAAP, excluding interest capitalized during construction minus

(b) the aggregate of such amounts used to acquire assets useful in the Borrower’s and its Restricted Subsidiaries’ business to the extent such amounts arose from a sale or disposition of equipment described in Section 8.4(c) (Sale of Assets);

excluding, however, (i) such amounts to the extent financed with the proceeds of Indebtedness permitted to be incurred hereunder (other than the Loans), (ii) such amounts to the extent financed with insurance or condemnation proceeds received with respect to loss of, damage to or taking of property of the Borrower or any of its Restricted Subsidiaries, (iii) such amounts recovered or recoverable in the price of a contract with a customer of the Borrower or a Restricted Subsidiary, (iv) to the extent that the Cobia Permitted Acquisition, any Cobia Permitted Investment or any Permitted Acquisition would otherwise constitute Capital Expenditures, such amounts, and (v) such amounts related to Cobia Equipment purchased or otherwise acquired by the Borrower or any of its Restricted Subsidiaries in an aggregate amount since December 8, 2009, of up to $138,500,000.00.

“Capital Lease” means, with respect to any Person, any lease of (or other arrangement conveying the right to use) property by such Person as lessee that would be accounted for as a capital lease on a balance sheet of such Person prepared in conformity with GAAP.

“Capital Lease Obligations” means, with respect to any Person, the capitalized amount of all obligations of such Person or any of its Restricted Subsidiaries under Capital Leases, as determined on a consolidated basis in conformity with GAAP.

“Captive Insurance Subsidiary” means each captive insurance company that is a Subsidiary of the Borrower. As of the Effective Date, the only Captive Insurance Subsidiary is Lagniappe Insurance Company, Ltd., a Bermuda corporation. As part of the Spin Steps, Boudin Insurance Company, Ltd., a Bermuda corporation, will also become a Captive Insurance Subsidiary.

“Cash Collateral Account” means any blocked cash collateral account pledged by the Borrower to the Collateral Agent for the benefit of the Secured Parties containing cash deposited pursuant to Section 2.4(b) (Letters of Credit), 2.19 (Cash Collateral), or 9.3 (Actions in Respect of Letters of Credit) to be maintained at the Collateral Agent’s office.

“Cash Equivalents” means:

(a) securities issued or fully guaranteed or insured by the United States government or any agency thereof;

(b) certificates of deposit, eurodollar time deposits, overnight bank deposits and bankers’ acceptances of (i) any commercial bank organized under the laws of the United States, any state thereof, the District of Columbia, any foreign bank organized in a country belonging to the OECD, or any branch or agency of any of the foregoing, in each case if such bank has a minimum rating at the time of investment of A-1+ by S&P or P-1 by Moody’s, or (ii) any Lender or any branch or agency of any Lender;

(c) commercial paper with a minimum rating of A-1 or AAA by S&P or P-1 or Aaa by Moody’s at the time of acquisition thereof;

(d) demand deposit accounts;

(e) (i) shares of any money market fund that has net assets of not less than $500,000,000.00 and satisfies the requirements of rule 2a-7 under the Investment Company Act of 1940 and (ii) shares of any offshore money market fund that has net assets of not less than $500,000,000.00 and a $1 net asset mandate;

(f) fully collateralized repurchase agreements; and

(g) other investments permitted by the McDermott International Investments Co., Inc. Enhanced Liquidity Portfolio Guidelines dated as of July 21, 2008 (as amended through the Effective Date), or any other cash management guidelines approved by the Borrower and the Administrative Agent;

provided, however, that the maturities of all obligations of the type described in clauses (a), (b) and (c) above shall not exceed one year from the date of acquisition thereof.

“Cash Interest Expense” means, with respect to the Borrower and its Restricted Subsidiaries for any period, Interest Expense for such period minus, to the extent included in the calculation of Interest Expense for such period, (a) the amount of debt discount and debt issuance costs amortized, (b) charges relating to write-ups or write-downs in the book or carrying value of existing Financial Covenant Debt and (c) interest payable in evidences of Indebtedness or by addition to the principal of the related Indebtedness.

“Change of Control” means any of the following:

(a) prior to the effective time of the Spin, the New Borrower shall cease to own and control, directly or indirectly, 100% of the issued and outstanding Voting Stock of the Initial Borrower on a fully diluted basis;

(b) any “person” or “group” (within the meaning of Rule 13d-5 of the Securities Exchange Act of 1934 as in effect on the date hereof) (excluding the New Borrower and its Subsidiaries and excluding underwriters in the course of their distribution of Voting Stock in an underwritten registered public offering provided such underwriters shall not hold such Stock for longer than five Business Days) (i) shall own directly or indirectly, beneficially or of record, Stock representing more than 30% of either the aggregate ordinary voting power or the aggregate equity value represented by the issued and outstanding Stock in the New Borrower or (ii) shall have obtained the power (whether or not exercised) to elect a majority of the members of the board of directors of the New Borrower or prior to the effective time of the Spin, the Initial Borrower; or

(c) during any period of twelve consecutive calendar months, individuals who at the beginning of such period constituted the board of directors of either the New Borrower or, prior to the effective time of the Spin, the Initial Borrower (together with any new directors whose election by the board of directors of the Initial Borrower or the New Borrower, as applicable, or whose nomination for election by the stockholders of the Initial Borrower or the New Borrower, as applicable, was approved by a vote of at least a majority of the directors then still in office who either were directors at the beginning of such period or whose elections or nomination for election was previously so approved) cease for any reason other than death or disability to constitute a majority of the directors then in office.

“Cobia AcquisitionCo” means J. Ray McDermott (Norway), AS, a private limited liability company organized and existing under the laws of Norway.

“Cobia Entities” means, collectively, Cobia AcquisitionCo, North Ocean II KS, a limited partnership organized and existing under the laws of Norway, North Ocean II AS, a private limited liability company organized and existing under the laws of Norway, and North Ocean V AS, a private limited liability company organized and existing under the laws of Norway. “Cobia Entity” means any of the Cobia Entities.

“Cobia Equipment” means, (a) with respect to the vessel CSV North Ocean 102, the equipment comprising the vertical lay system (including a tower with aligner and tensioner(s), product highway, level winder, deepwater lowering system, one crane, and related or ancillary components), (b) with respect to the CSV North Ocean 105, the equipment comprising the rigid reel system (including the vertical reel, level winder, tower with aligner, straightener and tensioner(s), abandonment and recovery winch, incremental power unit, and related or ancillary components), and (c) the land-based reel base to be purchased and/or constructed in connection with the foregoing, in each case including related assets that are utilized solely in connection with the foregoing equipment and proceeds of the foregoing.

“Cobia Permitted Acquisition” means (a) the acquisition by Cobia AcquisitionCo of 50% or more of the Stock of North Ocean II AS, a private limited liability company organized and existing under the laws of Norway, 45% or more of the Stock of North Ocean II KS, a limited partnership organized and existing under the laws of Norway, and

75% or more of the Stock of North Ocean V AS, a private limited liability company organized and existing under the laws of Norway and (b) any Investments by the Borrower and its Subsidiaries in Cobia AcquisitionCo necessary to effect such acquisition; provided that:

(i) immediately after giving effect to such transactions, the Borrower would be in compliance with Section 8.7 (Change in Nature of Business);

(ii) immediately after giving effect to such transactions, the Available Credit plus any unrestricted cash and Cash Equivalents of the Borrower and its Restricted Subsidiaries shall not be less than $75,000,000.00;

(iii) immediately after giving effect to such transactions, (i) no Default or Event of Default shall have occurred and be continuing and the Borrower shall have demonstrated to the Administrative Agent compliance with Section 5.1 (Maximum Leverage Ratio) on a pro forma basis as of the most recent Fiscal Quarter end for which financial statements are available as if such maximum Leverage Ratio were 0.25:1.00 more restrictive than as set forth in Section 5.1 (Maximum Leverage Ratio) and (ii) the statement set forth in Section 3.2(b)(i) (Representations and Warranties; No Defaults) shall be true;

(iv) the aggregate consideration (excluding charter payments, Guaranty Obligations and any future option payments) in respect of such transactions since December 6, 2009 does not exceed $61,600,000.00; and

(v) the Borrower shall have delivered to the Administrative Agent a certificate of a Responsible Officer of the Borrower certifying the accuracy of each of the foregoing conditions.

“Cobia Permitted Asset Sale” means any Asset Sale to any Cobia Entity of any Cobia Equipment; provided that:

(a) no Default or Event of Default is continuing or would result therefrom; and

(b) the aggregate consideration for such Asset Sales since December 6, 2009 does not exceed $138,500,000.00.

“Cobia Permitted Investments” means any Investment in any Cobia Entity; provided that:

(a) immediately after giving effect to such Investment, the Available Credit plus any unrestricted cash and Cash Equivalents of the Borrower and its Restricted Subsidiaries shall not be less than $75,000,000.00;

(b) immediately after giving effect to such Investment, (i) no Default or Event of Default shall have occurred and be continuing and, if such Investment or

series of related Investments exceeds $20,000,000.00, the Borrower shall have demonstrated to the Administrative Agent compliance with Section 5.1 (Maximum Leverage Ratio) on a pro forma basis as of the most recent Fiscal Quarter end for which financial statements are available as if such maximum Leverage Ratio were 0.25:1.00 more restrictive than as set forth in Section 5.1 (Maximum Leverage Ratio) and (ii) the statement set forth in Section 3.2(b)(i) (Representations and Warranties; No Defaults) shall be true;

(d) if the amount of such Investment or series of related Investments is in excess of $20,000,000.00, the Borrower shall have delivered to the Administrative Agent a certificate of a Responsible Officer of the Borrower certifying the accuracy of each of the foregoing conditions.

“Code” means the Internal Revenue Code of 1986 (or any successor legislation thereto).

“Collateral” means all property and interests in property and proceeds thereof now owned or hereafter acquired by any Loan Party in or upon which a Lien is granted under any Collateral Document.

“Collateral Agent” has the meaning specified in the preamble to this Agreement.

“Collateral Documents” means the Pledge and Security Agreement, the Mortgages and any other document executed and delivered by a Loan Party granting or perfecting a Lien on any of its property to secure payment of the Obligations.

“Compliance Certificate” has the meaning specified in Section 6.1(c) (Financial Statements).

“Consolidated Net Income” means, for any period, the net income (or loss) of the Borrower and its Restricted Subsidiaries for such period determined on a consolidated basis in accordance with GAAP.

“Constituent Documents” means, with respect to any Person, (a) the articles of incorporation, certificate of incorporation or certificate of formation (or the equivalent organizational documents) of such Person and (b) the by-laws, operating agreement or partnership agreement (or the equivalent governing documents) of such Person.

“Contaminant” means any material, substance or waste that is classified, regulated or otherwise characterized under any Environmental Law as hazardous, toxic, a contaminant or a pollutant or by other words of similar meaning or regulatory effect, including any petroleum or petroleum-derived substance or waste, asbestos and polychlorinated biphenyls.

“Contractual Obligation” of any Person means any obligation, agreement, undertaking or similar provision of any Security issued by such Person or of any agreement, undertaking, contract, lease, indenture, mortgage, deed of trust or other instrument (excluding the Loan Documents) to which such Person is a party or by which it or any of its property is bound.

“Co-Documentation Agents” means Wells Fargo Bank, N.A., Bank of America, N.A., The Bank of Nova Scotia, and BBVA Compass, each in their capacity as co-documentation agent.

“Customary Permitted Liens” means, with respect to any Person, any of the following Liens:

(a) Liens with respect to the payment of taxes, assessments or governmental charges in each case that are not yet due or that are being contested in good faith by appropriate proceedings and with respect to which adequate reserves or other appropriate provisions are being maintained to the extent required by GAAP and, in the case of Collateral, there is no material risk of forfeiture of such property;

(b) Liens of landlords arising by statute or lease contracts entered into in the ordinary course, inchoate, statutory or construction liens, maritime liens and liens of suppliers, mechanics, carriers, materialmen, warehousemen, producers, operators or workmen and other liens imposed by law created in the ordinary course of business for amounts not yet due or that are being contested in good faith by appropriate proceedings and with respect to which adequate reserves or other appropriate provisions are being maintained to the extent required by GAAP;

(c) liens, pledges or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance or other types of social security benefits, taxes, assessments, statutory obligations or other similar charges or to secure the performance of bids, tenders, sales, leases, contracts (other than for the repayment of borrowed money) or in connection with surety, appeal, customs or performance bonds or other similar instruments;

(d) encumbrances arising by reason of zoning restrictions, easements, licenses, reservations, covenants, rights-of-way, utility easements, building restrictions and other similar encumbrances on the use of Real Property not materially detracting from the value of such Real Property and not materially interfering with the ordinary conduct of the business conducted at such Real Property;

(e) encumbrances arising under leases or subleases of Real Property that do not, individually or in the aggregate, materially detract from the value of such Real Property or materially interfere with the ordinary conduct of the business conducted at such Real Property;

(f) financing statements with respect to a lessor’s rights in and to personal property leased to such Person in the ordinary course of such Person’s business;

(g) liens, pledges or deposits relating to escrows established in connection with the purchase or sale of property otherwise permitted hereunder and the amounts secured thereby shall not exceed the aggregate consideration in connection with such purchase or sale (whether established for an adjustment in purchase price or liabilities, to secure indemnities, or otherwise); and

(h) bankers’ Liens, rights of setoff and other similar Liens existing solely with respect to cash and Cash Equivalents on deposit in one or more accounts maintained by the Borrower or a Subsidiary of the Borrower, in each case granted in the ordinary course of business in favor of the bank or banks with which such accounts are maintained, securing amounts owing to such bank with respect to cash management and operating account arrangements, including those involving pooled accounts and netting arrangements; provided that, unless such Liens are non-consensual and arise by operation of law, in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness.

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

“Default” means any event that, with the passing of time or the giving of notice or both, would become an Event of Default.

“Defaulting Lender” means, subject to Section 2.20(b) (Defaulting Lender Cure), any Lender that, as determined by the Administrative Agent:

(a) has failed to perform any of its funding obligations hereunder, including in respect of its Loans or participations in respect of Letters of Credit or Swing Loans, within three Business Days of the date required to be funded by it hereunder;

(b) has notified the Borrower, the Administrative Agent or any Lender that it does not intend to comply with its funding obligations or has made a public statement to that effect with respect to its funding obligations hereunder or generally under other agreements in which it commits to extend credit;

(c) has failed, within three Business Days after request by the Administrative Agent, to confirm in a manner satisfactory to the Administrative Agent that it will comply with its funding obligations hereunder; or

(d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or a custodian appointed for it, or (iii) taken any action in furtherance of, or indicated its consent to, approval of or acquiescence in any such proceeding or appointment; provided that a Lender shall not be a Defaulting

Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority.

“Disqualified Stock” means with respect to any Person, any Stock that, by its terms (or by the terms of any Security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is exchangeable for Indebtedness of such Person, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is 91 days after the Revolving Facility Termination Date.

“Dollar Equivalent” means with respect to any Alternative Currency at the time of determination thereof, the equivalent of such currency in Dollars determined by using the rate of exchange quoted by (a) in the case the payment and reimbursement of a drawing under a Letter of Credit issued in an Alternative Currency, the Issuer of such Letter of Credit and (b) in all other cases, CA CIB in New York, New York at 11:00 a.m. (New York time) on the date of determination to prime banks in New York for the spot purchase in the New York foreign exchange market of such amount of Dollars with such Alternative Currency.

“Dollars” and the sign “$” each mean the lawful money of the United States of America.

“Domestic Lending Office” means, with respect to any Lender, the office of such Lender specified as its “Domestic Lending Office” from time to time to the Borrower and the Administrative Agent.

“EBITDA” means, for any period:

(a) Consolidated Net Income for such period plus

(b) the sum of, in each case to the extent deducted in the calculation of such Consolidated Net Income but without duplication:

(i) any provision for income taxes;

(ii) Interest Expense;

(iii) depreciation expense;

(iv) amortization of intangibles or financing or acquisition costs;

(v) any aggregate net loss from the sale, exchange or other disposition of business units by the Borrower or its Restricted Subsidiaries out of the ordinary course of business; and

(vi) all other non-cash charges (including impairment of intangible assets and goodwill) and non-cash losses for such period;

provided, that, to the extent that all or any portion of the income or gains of any Person is deducted pursuant to any of clauses (c)(iv) and (c)(v) below for a given period, any amounts set forth in any of the preceding clauses (b)(i) through (b)(vi) that are attributable to such Person shall not be included for purposes of this clause (b) for such period, minus

(c) the sum of, in each case to the extent included in the calculation of such Consolidated Net Income but without duplication:

(i) any credit for income tax;

(ii) non-cash interest income;

(iii) any other non-cash gains which have been added in determining Consolidated Net Income (other than any such gain or other item that has been deducted in determining EBITDA for a prior period);

(iv) the income of any Restricted Subsidiary that is not a Guarantor to the extent that the declaration or payment of dividends or similar distributions or transfers or loans by such Restricted Subsidiary of that income is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, statute, rule or governmental regulation applicable to such Restricted Subsidiary;

(v) the income of any Person (other than a Restricted Subsidiary) in which any other Person (other than the Borrower or a Wholly-Owned Restricted Subsidiary or any director holding qualifying shares in accordance with applicable law) has an interest, except to the extent of the amount of dividends or other distributions or transfers or loans actually paid to the Borrower or a Wholly-Owned Restricted Subsidiary by such Person during such period;

(vi) any aggregate net gains from the sale, exchange or other disposition of business units by the Borrower or its Restricted Subsidiaries out of the ordinary course of business; and

(vii) cash payments during each period not deducted in the determination of Consolidated Net Income on account of non-cash charges and non-cash losses taken in a prior period.

EBITDA for a consecutive four-quarter period shall be calculated after giving effect, on a pro forma basis, to Acquisitions made by the Borrower or its Restricted Subsidiaries during such period and the sale, exchange or other disposition of business units by the Borrower or its Restricted Subsidiaries out of the ordinary course of business during such period (and subsequent to such period and on or before the date of incurrence

of the Indebtedness giving rise to the need to calculate the Leverage Ratio) as if such Acquisitions or sale, exchange or other disposition occurred on the first day of the period so long as the Borrower provides to the Administrative Agent reconciliations and other detailed information relating to adjustments to the relevant financial statements (including copies of financial statements of the Person or assets acquired in such Acquisition) used in computing EBITDA (and the relevant elements thereof) sufficient to demonstrate such pro forma calculations in reasonable detail.

“Effective Date” has the meaning specified in Section 3.1 (Conditions Precedent to Effectiveness).

“Eligible Assignee” means (a) a Lender or any Affiliate of a Lender or an Approved Fund, (b) a commercial bank having total assets in excess of $5,000,000,000.00, (c) a finance company, insurance company or any other financial institution or fund, in each case reasonably acceptable to the Administrative Agent and regularly engaged in making, purchasing or investing in loans and having a net worth, determined in accordance with GAAP, in excess of $250,000,000.00 or, to the extent net worth is less than such amount, a finance company, insurance company, other financial institution or fund, reasonably acceptable to the Administrative Agent and the Borrower (which consent shall, in each case, not be unreasonably withheld or delayed) or (d) a savings and loan association or savings bank organized under the laws of the United States or any State thereof having a net worth, determined in accordance with GAAP, in excess of $250,000,000.00; provided, that, the term Eligible Assignee shall exclude any competitor of the Borrower or any of its Subsidiaries which is primarily engaged in an Eligible Line of Business and which has been previously identified as such by the Borrower to the Administrative Agent.

“Eligible Line of Business” means the businesses and activities engaged in by the Borrower and its Subsidiaries on the Effective Date, any other businesses or activities reasonably related or incidental thereto and any other businesses that, when taken together with the existing businesses of the Borrower and its Subsidiaries, are immaterial with respect to the assets and liabilities of the Borrower and its Subsidiaries, taken as a whole.

“Employee Benefit Plan” means any “employee benefit plan” as defined in Section 3(3) of ERISA which is or was sponsored, maintained or contributed to by, or required to be contributed by, the Borrower, any of its Subsidiaries, any Guarantor or any of their respective ERISA Affiliates.

“Environmental Laws” means all applicable Requirements of Law now or hereafter in effect and as amended or supplemented from time to time, relating to pollution or the regulation and protection of human health, safety, the environment or natural resources, including the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. § 9601 et seq.); the Hazardous Material Transportation Act, as amended (49 U.S.C. § 1801 et seq.); the Federal Insecticide, Fungicide, and Rodenticide Act, as amended (7 U.S.C. § 136 et seq.); the Resource Conservation and Recovery Act, as amended (42 U.S.C. § 6901 et seq.); the Toxic

Substance Control Act, as amended (15 U.S.C. § 2601 et seq.); the Clean Air Act, as amended (42 U.S.C. § 7401 et seq.); the Federal Water Pollution Control Act, as amended (33 U.S.C. § 1251 et seq.); the Occupational Safety and Health Act, as amended (29 U.S.C. § 651 et seq.); the Safe Drinking Water Act, as amended (42 U.S.C. § 300f et seq.); the Oil Pollution Act of 1990; and each of their state and local counterparts or equivalents.

“Environmental Liabilities and Costs” means, with respect to any Person, all liabilities, obligations, responsibilities, Remedial Actions, losses, damages, punitive damages, consequential damages, treble damages, costs and expenses (including all fees, disbursements and expenses of counsel, experts and consultants and costs of investigation and feasibility studies), fines, penalties, sanctions and interest incurred as a result of any claim or demand by any other Person, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute and arising under any Environmental Law, Permit, order or agreement with any Governmental Authority or other Person, in each case relating to and resulting from the past, present or future operations of, or ownership of property by, such Person or any of its Subsidiaries.

“Environmental Lien” means any Lien in favor of any Governmental Authority pursuant to any Environmental Law.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control or treated as a single employer with the Borrower, any of its Subsidiaries or any Guarantor within the meaning of Section 414(b), (c), (m) or (o) of the Code. Any former ERISA Affiliate of the Borrower, any of its Subsidiaries or any Guarantor shall continue to be considered an ERISA Affiliate of the Borrower, such Subsidiary or such Guarantor within the meaning of this definition with respect to the period such entity was an ERISA Affiliate of the Borrower, such Subsidiary or such Guarantor and with respect to liabilities arising after such period for which the Borrower, such Subsidiary or such Guarantor could be liable under the Code or ERISA.

“ERISA Event” means (a) a reportable event described in Section 4043(b) or 4043(c) of ERISA with respect to a Title IV Plan, (b) the withdrawal of the Borrower, any of its Subsidiaries, any Guarantor or any ERISA Affiliate from a Title IV Plan subject to Section 4063 or Section 4064 of ERISA during a plan year in which any such entity was a “substantial employer” (as defined in Section 4001(a)(2) of ERISA) or the termination of any such Title IV Plan resulting, in either case, in a material liability to any such entity, (c) the “complete or partial withdrawal” (within the meaning of Sections 4203 and 4205 of ERISA) of the Borrower, any of its Subsidiaries, any Guarantor or any ERISA Affiliate from any Multiemployer Plan where the Withdrawal Liability is reasonably expected to exceed $1,000,000.00 (individually or in the aggregate), (d) notice of reorganization, insolvency, intent to terminate or termination of a Multiemployer Plan is received by the Borrower, any of its Subsidiaries, any Guarantor or any ERISA Affiliate, (e) the filing of a notice of intent to terminate a Title IV Plan

under Section 4041(c) of ERISA or the treatment of a plan amendment as a termination under Section 4041(e) of ERISA, where such termination constitutes a “distress termination” under Section 4041(c) of ERISA, (f) the institution of proceedings to terminate a Title IV Plan by the PBGC, (g) the failure to make any required contribution to a Title IV Plan or Multiemployer Plan or to meet the minimum funding standard of Section 412 of the Code (in either case, whether or not waived in accordance with Section 412(c) of the Code), (h) the imposition of a lien under Section 430 of the Code or Section 303 of ERISA on the Borrower, any of its Subsidiaries, any Guarantor or any ERISA Affiliate, (i) any other event or condition that might reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan or the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, (j) the imposition of liability on the Borrower, any of its Subsidiaries, any Guarantor or any of their respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA, (k) the occurrence of an act or omission which could reasonably be expected to give rise to the imposition on the Borrower, any of its Subsidiaries, any Guarantor or any of their respective ERISA Affiliates of fines, penalties, taxes or related charges under Chapter 43 of the Code or under Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any “employee pension plan” (within the meaning of Section 3(2) of ERISA) or (l) receipt from the IRS of notice of the failure of any employee pension plan that is intended to be qualified under Section 401(a) of the Code) to qualify under Section 401(a) of the Code, or the failure of any trust forming part of any such employee pension plan to qualify for exemption from taxation under Section 501(a) of the Code.

“Eurodollar Lending Office” means, with respect to any Lender, the office of such Lender specified as its “Eurodollar Lending Office” from time to time to the Borrower and the Administrative Agent.

“Eurodollar Rate” means, (a) with respect to any Eurodollar Rate Loan for any Interest Period, the rate per annum determined by the Administrative Agent at approximately 11:00 a.m. (London time) on the date that is two Business Days prior to the beginning of such Interest Period by reference to the British Bankers Association LIBOR Rate, as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as may be designated by the Administrative Agent from time to time) (“BBA LIBOR”) for a period equal to such Interest Period and (b) for any interest calculation of the Eurodollar Rate with respect to a Base Rate Loan on any date, the rate per annum determined by the Administrative Agent at approximately 11:00 a.m. (London time) on the date that is two Business Days prior to such date by reference to the BBA LIBOR for a term of one month commencing on that day;

provided, however, that if the BBA LIBOR is not available to the Administrative Agent for any reason, then the applicable Eurodollar Rate for the relevant Interest Period shall instead be the average of the rates per annum at which deposits in Dollars are offered for such Interest Period to major banks in the London interbank market in London, England by the Administrative Agent at approximately 11:00 a.m. (London

time) on the date which is two Business Days prior to the beginning of such Interest Period. Each determination by the Administrative Agent pursuant to this definition shall be conclusive absent manifest error.

“Eurodollar Rate Loan” means any Loan that, for an Interest Period, bears interest based on the Eurodollar Rate.

“Event of Default” has the meaning specified in Section 9.1 (Events of Default).

“Existing Babcock Guaranties” means the New Borrower’s or any of its Subsidiaries’ (other than the Babcock Entities) Guaranty Obligations in respect of obligations of any of the Babcock Entities listed as items 11, 12, and 13 on the attached Schedule 8.8.

“Existing Letters of Credit” means each letter of credit listed on Schedule 2.4.

“Extended Letter of Credit” has the meaning specified in Section 2.4(b) (Letters of Credit).

“Fair Market Value” means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party; provided that, for any determination of Fair Market Value in connection with an Asset Sale to be made pursuant to Section 8.4(h) or (i) in which the Fair Market Value of the properties disposed of in such Asset Sale exceeds $10,000,000.00, the Borrower shall provide evidence reasonably satisfactory to the Administrative Agent with respect to the calculation of such Fair Market Value.

“Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

“Federal Reserve Board” means the Board of Governors of the United States Federal Reserve System, or any successor thereto.

“Fee Letters” means (a) the Fee Letter, dated March 25, 2010, addressed to the Initial Borrower from CA CIB and accepted by the Initial Borrower on March 25, 2010, (b) the Joint Fee Letter, dated March 25, 2010 addressed to the Initial Borrower from CA CIB, Banc of America Securities LLC, Bank of America, N.A., Wells Fargo Securities, LLC and Wells Fargo Bank, N.A. and accepted by the Initial Borrower on March 25, 2010, (c) the BAS Fee letter, dated March 25, 2010, addressed to the Initial Borrower from Banc of America Securities LLC and Bank of America, N.A. and accepted by the Initial Borrower on March 25, 2010, and (d) the WFS Fee Letter, dated March 25, 2010,

addressed to the Initial Borrower from Wells Fargo Securities, LLC and Wells Fargo Bank, N.A. and accepted by the Initial Borrower on March 25, 2010.

“Financial Covenant Debt” means Disqualified Stock of the Borrower and, without duplication, Indebtedness of the Borrower and its Restricted Subsidiaries of the type specified in clauses (a), (b), (c), (d), (e), (f), (g) and (h) of the definition of “Indebtedness” determined on a consolidated basis in accordance with GAAP. For the avoidance of doubt, the term “Financial Covenant Debt” shall not include (a) reimbursement or other obligations with respect to unmatured or undrawn, as applicable, Performance Guarantees and (b) Indebtedness of the Borrower or any of its Restricted Subsidiaries that is owed to the Borrower, any of its Restricted Subsidiaries or any Joint Venture that is a Guarantor.

“Financial Letter of Credit” means a Letter of Credit other than a Performance Letter of Credit.

“Financial Statements” means the financial statements of the Borrower and its Subsidiaries delivered in accordance with Section 3.1(b) (Conditions Precedent to Effectiveness), Section 4.4 (Financial Statements) or 6.1 (Financial Statements).

“Fiscal Quarter” means the fiscal quarter of the Borrower ending on March 31, June 30, September 30 or December 31 of the applicable calendar year, as applicable.

“Fiscal Year” means the fiscal year of the Borrower, which is the same as the calendar year.

“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with respect to any Issuer, such Defaulting Lender’s Ratable Portion of the outstanding Letter of Credit Obligations of such Issuer, other than Letter of Credit Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or cash collateralized in accordance with the terms hereof and (b) with respect to the Swing Loan Lender, such Defaulting Lender’s Ratable Portion of Swing Loans other than Swing Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or repaid in accordance with the terms hereof.

“Fronting Fee” means the Fronting Fee specified in Section 2.12(b)(i) (Letter of Credit Fees).

“Fund” means any Person (other than a natural person) that is or will be engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course.

“GAAP” means generally accepted accounting principles in the United States of America as in effect from time to time.

“G-20 Countries” means Argentina, Australia, Brazil, Canada, China, the European Union, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi

Arabia, South Africa, South Korea, Turkey, the United Kingdom, and the United States of America.

“Global Intercompany Note” means the global intercompany note substantially in the form of Exhibit G (Global Intercompany Note) hereto.

“Governmental Authority” means any nation, sovereign or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any central bank.

“Guarantors” means (a) each Person listed on Schedule III hereto, (b) each Person that becomes a party to the Pledge and Security Agreement after the date hereof pursuant to Section 7.11 (Additional Collateral and Guaranties) or otherwise, and (c) immediately after the effective time of the Spin, the Initial Borrower.

“Guaranty Obligation” means, as applied to any Person, without duplication, any direct or indirect liability, contingent or otherwise, of such Person with respect to any Indebtedness of another Person, if the purpose of such Person in incurring such liability is to provide assurance to the obligee of such Indebtedness that such Indebtedness will be paid or discharged, or that any agreement relating thereto will be complied with, or that any holder of such Indebtedness will be protected (in whole or in part) against loss in respect thereof, including (a) the direct or indirect guaranty, endorsement (other than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of Indebtedness of another Person and (b) any liability of such Person for Indebtedness of another Person through any agreement (contingent or otherwise) (i) to purchase, repurchase or otherwise acquire such Indebtedness or any security therefor, or to provide funds for the payment or discharge of such Indebtedness (whether in the form of a loan, advance, stock purchase, capital contribution or otherwise), (ii) to maintain the solvency or any balance sheet item, level of income or financial condition of another Person, (iii) to make take-or-pay or similar payments, regardless of non-performance by any other party or parties to an agreement, (iv) to purchase, sell or lease (as lessor or lessee) property, or to purchase or sell services, primarily for the purpose of enabling the debtor to make payment of such Indebtedness or to assure the holder of such Indebtedness against loss or (v) to supply funds to, or in any other manner invest in, such other Person (including to pay for property or services irrespective of whether such property is received or such services are rendered), if (and only if) in the case of any agreement described under clause (b)(i), (ii), (iii), (iv) or (v) above the primary purpose or intent thereof is to provide assurance to the obligee of Indebtedness of any other Person that such Indebtedness will be paid or discharged, or that any agreement relating thereto will be complied with, or that any holder of such Indebtedness will be protected (in whole or in part) against loss in respect thereof. The amount of any Guaranty Obligation shall be equal to the amount of the Indebtedness so guaranteed or otherwise supported or, if such amount is not stated or otherwise determinable, the maximum reasonable anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. For the avoidance of doubt, the

term “Guaranty Obligation” shall not include reimbursement or other obligations with respect to unmatured or undrawn, as applicable, Performance Guarantees.

“Hedging Contracts” means all Interest Rate Contracts, foreign exchange contracts, currency swap or option agreements, forward contracts, commodity swap, purchase or option agreements, other commodity price hedging arrangements, and all other similar agreements or arrangements designed to alter the risks of any Person arising from fluctuations in interest rates, currency values or commodity prices.

“Immaterial Guarantor” means a Guarantor that does not satisfy the Threshold Amount.

“Increased Amount Date” has the meaning specified in Section 2.18 (Incremental Revolving Commitments).

“Indebtedness” of any Person means, without duplication:

(a) all indebtedness of such Person for borrowed money;

(b) all obligations of such Person evidenced by promissory notes, bonds, debentures or similar instruments;

(c) all matured reimbursement obligations with respect to letters of credit, bankers’ acceptances, surety bonds, performance bonds, bank guarantees, and other similar obligations;

(d) all other obligations with respect to letters of credit, bankers’ acceptances, surety bonds, performance bonds, bank guarantees and other similar obligations, whether or not matured, other than unmatured or undrawn, as applicable, obligations with respect to Performance Guarantees;

(e) all indebtedness for the deferred purchase price of property or services, other than trade payables incurred in the ordinary course of business that are not overdue by more than 90 days or disputed in good faith;

(f) all indebtedness of such Person created or arising under any conditional sale or other title retention agreement (other than operating leases) with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property);

(g) all Capital Lease Obligations of such Person;

(h) all Guaranty Obligations of such Person;

(i) all obligations of such Person to purchase, redeem, retire, defease or otherwise acquire for value any Stock or Stock Equivalents of such Person, valued, in

the case of redeemable preferred stock, at the greater of its voluntary liquidation preference and its involuntary liquidation preference plus accrued and unpaid dividends;

(j) net payments that such Person would have to make in the event of an early termination as determined on the date Indebtedness of such Person is being determined in respect of Hedging Contracts of such Person; and

(k) all Indebtedness of the type referred to above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property (including accounts and general intangibles) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness, but amounts of such Indebtedness shall be the lesser of the value of the property owned by such Person securing such Indebtedness and the principal amount of such Indebtedness.

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation, limited liability company or other entity in which the liability of the joint venturer is limited) in which such Person is a general partner or a joint venturer, except to the extent such Person’s liability for such Indebtedness is otherwise limited by applicable law or contract. For the avoidance of doubt, the term “Indebtedness” shall not include reimbursement or other obligations with respect to unmatured or undrawn, as applicable, Performance Guarantees.

“Indemnified Matter” has the meaning specified in Section 11.4 (Indemnities).

“Indemnitees” has the meaning specified in Section 11.4 (Indemnities).

“Information” means all information received from the New Borrower or any of its Subsidiaries relating to the New Borrower or any of its Subsidiaries or any of their respective businesses after the date hereof that is posted to IntraLinks or otherwise clearly identified at the time of delivery as confidential other than any such information that is available to the Administrative Agent, any Lender or any Issuer on a nonconfidential basis prior to disclosure by the New Borrower or any of its Subsidiaries.

“Information Memorandum” means the Confidential Information Memorandum related to this Agreement dated March, 2010.

“Initial Borrower” has the meaning specified in the preamble to this Agreement.

“Interest Coverage Ratio” means, for any period, the ratio of (a) EBITDA for such period to (b) the Cash Interest Expense for such period.

“Interest Expense” means, for the Borrower for any period, total interest expense of the Borrower and its Restricted Subsidiaries for such period, as determined on a consolidated basis in conformity with GAAP and including, in any event (without duplication for any period or any amount included in any prior period):

(a) net costs under Interest Rate Contracts for such period;

(b) any commitment fee (including the Revolving Commitment Fee) accrued, accreted or paid by such Person during such period;

(c) any fees and other obligations (other than reimbursement obligations) with respect to letters of credit (including the Letter of Credit Participation Fees) and bankers’ acceptances (whether or not matured) accrued, accreted or paid by such Person for such period; and

(d) the Fronting Fee.

For purposes of the foregoing, interest expense shall (i) be determined after giving effect to any net payments made or received by the Borrower or any Restricted Subsidiary with respect to interest rate Hedging Contracts and (ii) exclude interest expense accrued, accreted or paid by the Borrower or any Restricted Subsidiary of the Borrower to the Borrower or any Restricted Subsidiary of the Borrower.

“Interest Period” means, in the case of any Eurodollar Rate Loan, (a) initially, the period commencing on the date such Eurodollar Rate Loan is made or on the date of conversion of a Base Rate Loan to such Eurodollar Rate Loan and ending one, three or six months thereafter or, with the prior written consent of all Lenders, nine or twelve months thereafter, as selected by the Borrower in its Notice of Borrowing or Notice of Conversion or Continuation given to the Administrative Agent pursuant to Section 2.2 (Borrowing Procedures) or 2.11 (Conversion/Continuation Option), and (b) thereafter, if such Loan is continued, in whole or in part, as a Eurodollar Rate Loan pursuant to Section 2.11 (Conversion/Continuation Option), a period commencing on the last day of the immediately preceding Interest Period therefor and ending one, three or six months thereafter or, with the prior written consent of all Lenders, nine or twelve months thereafter, as selected by the Borrower in its Notice of Conversion or Continuation given to the Administrative Agent pursuant to Section 2.11 (Conversion/Continuation Option); provided, however, that all of the foregoing provisions relating to Interest Periods in respect of Eurodollar Rate Loans are subject to the following:

(i) if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day, unless the result of such extension would be to extend such Interest Period into another calendar month, in which event such Interest Period shall end on the immediately preceding Business Day;

(ii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month;

(iii) the Borrower may not select any Interest Period in respect of Loans having an aggregate principal amount of less than $5,000,000.00; and

(iv) there shall be outstanding at any one time no more than 10 Interest Periods in the aggregate.

“Interest Rate Contracts” means all interest rate swap agreements, interest rate cap agreements, interest rate collar agreements and interest rate insurance.

“Investment” means, with respect to any Person, any investment of such Person so classified under GAAP, and whether or not so classified, any loan, advance, extension of credit that constitutes Indebtedness of the Person to whom it is extended, any direct or indirect guaranty in respect of the Indebtedness of another Person by such Person, or contribution of capital by such Person, and any stocks, bonds, mutual funds, partnership interests, notes (including structured notes), debentures or other securities owned by such Person; excluding, however, (a) capital expenditures of such Person determined in accordance with GAAP, (b) prepayments or deposits made in the ordinary course of business, (c) accounts receivable and similar items made or incurred in the ordinary course of business and (d) the payment of the operating expenses and capital expenditures of a Restricted Subsidiary, so long as such payment is in the ordinary course of business and consistent with past business practices with respect to such Subsidiary prior to the date hereof. For the avoidance of doubt, the term “Investment” shall not include reimbursement or other obligations with respect to unmatured or undrawn, as applicable, Performance Guarantees.

“Inventory” has the meaning specified in the Pledge and Security Agreement.

“IRS” means the Internal Revenue Service of the United States or any successor thereto.

“ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice, Inc. (or such later version thereof as may be in effect at the time of Issuance).

“Issue” means, with respect to any Letter of Credit, to issue, extend the expiry of, renew or increase the maximum stated amount (including by deleting or reducing any scheduled decrease in such maximum stated amount) of, such Letter of Credit. The terms “Issued” and “Issuance” shall have a corresponding meaning.

“Issuer” means each Lender or Affiliate of a Lender that (a) is listed on Schedule IV, (b) hereafter becomes an Issuer with the approval of the Administrative Agent and the Borrower by agreeing pursuant to an agreement with and in form and substance satisfactory to the Administrative Agent and the Borrower to be bound by the terms hereof applicable to Issuers, or (c) solely with respect to Existing Letters of Credit, is an issuer of an Existing Letter of Credit.

“Joint Bookrunner” means each of CA CIB, Banc of America Securities LLC and Wells Fargo Securities, LLC as a joint bookrunner.

“Joint Lead Arranger” means each of CA CIB, Banc of America Securities LLC and Wells Fargo Securities, LLC as a joint lead arranger.

“Joint Venture” means (a) any Person (i) in which the Borrower or a Subsidiary of the Borrower, directly or indirectly, owns at least 30% of the Stock or Stock Equivalents of such Person and (ii) that is not a Subsidiary of the Borrower, and (b) prior to the effective time of the Spin, each Transferred Joint Venture (i) in which the New Borrower owns, directly or indirectly, at least 30% of the Stock or Stock Equivalents of such Person and (ii) that is not a Subsidiary of the New Borrower. As of the Effective Date, the Persons listed on Schedule 1.1 are Joint Ventures.

“Landlord Lien Waiver” means a lien waiver signed by a landlord, substantially in the form of Exhibit I or such other form that is satisfactory to the Administrative Agent.

“Leases” means, with respect to any Person, all of the leasehold estates in Real Property of such Person, as lessee, as such may be amended, supplemented or otherwise modified from time to time.

“Lender” means each financial institution or other entity that (a) is listed on the signature pages of the Agreement as a “Lender” (including each Swing Loan Lender) or (b) from time to time becomes a party hereto as a Lender by execution of an Assignment and Acceptance.

“Letter of Credit” means each Existing Letter of Credit and any letter of credit issued pursuant to Section 2.4 (Letters of Credit).

“Letter of Credit Issuer Commitment” means (a) the amount set forth on the attached Schedule IV for each Issuer or (b) such other amount as any Issuer and the Borrower may agree in a writing delivered to the Administrative Agent.

“Letter of Credit Obligations” means, at any time, without duplication, the aggregate amount of all liabilities at such time of the Borrower to all Issuers with respect to Letters of Credit, whether or not any such liability is contingent, including the sum of (a) the Reimbursement Obligations at such time (or, for any Reimbursement Obligations in any Alternative Currency, the Dollar Equivalent thereof at such time) and (b) the Letter of Credit Undrawn Amounts at such time.

“Letter of Credit Participation Fee” has the meaning specified in Section 2.12(b)(ii) (Letter of Credit Fees).

“Letter of Credit Reimbursement Agreement” has the meaning specified in Section 2.4(e) (Letters of Credit).

“Letter of Credit Request” has the meaning specified in Section 2.4(c) (Letters of Credit).

“Letter of Credit Undrawn Amounts” means, at any time, the aggregate undrawn face amount of all Letters of Credit outstanding at such time (or, for any Letter of Credit denominated in an Alternative Currency, the Dollar Equivalent thereof at such time).

“Leverage Ratio” means, as of any day, the ratio of (a) Financial Covenant Debt as of such day to (b) EBITDA for the last four full Fiscal Quarters ending prior to such day.

“Lien” means any mortgage, deed of trust, pledge, hypothecation, collateral assignment, charge, deposit arrangement, encumbrance, lien (statutory or other), security interest or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever intended to assure payment of any Indebtedness or the performance of any other obligation, including any conditional sale or other title retention agreement, the interest of a lessor under a Capital Lease and any financing lease having substantially the same economic effect as any of the foregoing, and the filing of any effective financing statement under the UCC or comparable law of any jurisdiction naming the owner of the asset to which such Lien relates as debtor.

“Loan” means any loan made by any Lender pursuant to this Agreement, including, unless the context requires otherwise, any Swing Loan made by the Swing Loan Lender.

“Loan Documents” means, collectively, this Agreement, the Notes (if any), each Letter of Credit Reimbursement Agreement, the Collateral Documents, the Global Intercompany Note, each Fee Letter, any agreement creating or perfecting rights in cash collateral pursuant to this Agreement and each certificate, agreement or document executed by a Loan Party and delivered to the Administrative Agent or any Lender in connection with or pursuant to any of the foregoing.

“Loan Party” means each of the Initial Borrower, the New Borrower and each Guarantor.

“Material Adverse Effect” means a material adverse effect upon (a) the condition (financial or otherwise), business, results of operations or properties of the Borrower and the Guarantors taken as a whole; (b) the perfection or priority of the Liens granted pursuant to the Collateral Documents; (c) the Loan Parties’ ability to perform their respective obligations under the Loan Documents; or (d) the validity or enforceability against the Loan Parties of the Loan Documents or the rights or remedies of the Administrative Agent, the Lenders or the Issuers thereunder.

“Material Intellectual Property” has the meaning specified in the Pledge and Security Agreement.

“Material Subsidiary” means, with respect to any date of determination, (a) a Restricted Subsidiary contributing (or, if such Restricted Subsidiary was not a Subsidiary of the Borrower for the entire Fiscal Year immediately preceding such date, that would have contributed) more than (i) 5% of the EBITDA or (ii) 5% of total assets (as determined in accordance with GAAP) of the Borrower and its Restricted Subsidiaries on a consolidated basis, in each case in the Fiscal Year immediately preceding such date or (b) two or more Restricted Subsidiaries contributing (or, if any such Restricted Subsidiary was not a Subsidiary of the Borrower for the entire Fiscal Year immediately

preceding such date, that would have contributed) more than (i) 5% of the EBITDA or (ii) 5% of total assets (as determined in accordance with GAAP) of the Borrower and its Restricted Subsidiaries on a consolidated basis, in each case in the Fiscal Year immediately preceding such date.

“Moody’s” means Moody’s Investors Services, Inc.

“Mortgaged Properties” means, initially, each parcel of real property and the improvements thereto owned or leased by a Loan Party and specified on Schedule 4.19(b), and shall include each other parcel of real property and improvements thereto with respect to which a Mortgage is granted pursuant to Section 7.12 (Real Property).

“Mortgaged Vessel Owning Subsidiary” means at any time any Subsidiary of the Borrower that owns a marine vessel that is or is required to become a Mortgaged Vessel under the terms of this Agreement and the Collateral Documents. As of the Effective Date, the Mortgaged Vessel Owning Subsidiaries and the Mortgaged Vessels owned by each are as follows:


Mortgaged Vessel Owning Subsidiary	Jurisdiction of Organization	Mortgaged Vessel	Vessel Flag

J. Ray McDermott Holdings, LLC	Delaware	McDermott Derrick Barge No. 16	U.S.A.

Barmada McDermott (L) Limited	Malaysia	McDermott Derrick Barge No. 26	Panama

Hydro Marine Services, Inc.	Panama	McDermott Derrick Barge No. 27	Panama

		McDermott Derrick Barge No. 30	Panama

		DB 101	Panama

		DLB KP1	Panama

		Intermac 650	Panama

		McDermott LB 32	Panama

J. Ray McDermott International Vessels, Ltd.	Cayman Islands	McDermott Derrick Barge No. 50	Panama

McDermott Gulf Operating Company, Inc.	Panama	Acadian Sea	Barbados

		Agile	Barbados

		Bold Endurance	Barbados

		Thebaud Sea	Canada (bareboat registered in Barbados)


Mortgaged Vessel Owning Subsidiary	Jurisdiction of Organization	Mortgaged Vessel	Vessel Flag
		Venture Sea	Canada

		Trinity Sea	Canada

		Mariner Sea	Canada

McDermott International Vessels, Inc.	Panama	Emerald Sea	Barbados

J. Ray McDermott Canada, Ltd.	Nova Scotia	Burin Sea	Canada

		Panuke Sea	Canada

		Hebron Sea	Canada

“Mortgaged Vessels” means at any time the marine vessels of the Borrower and the Guarantors that are subject to a lien under the Collateral Documents at such time, except, notwithstanding anything herein or in any other Collateral Document to the contrary, (a) the DB 23, which as of the Effective Date is flagged under the laws of the United States, shall not be a Mortgaged Vessel unless it is put back into marine operations by the Borrower or any of its Restricted Subsidiaries and (b) any marine vessel that is the subject of a Lien permitted under Section 8.2 (Liens, Etc.) (i) securing permitted Capital Leases or permitted purchase money Indebtedness incurred in connection with the acquisition of such marine vessel or (ii) existing at the time of (but not incurred in anticipation of) any such acquisition shall not be a Mortgaged Vessel. The Mortgaged Vessels shall consist of the following as of the Effective Date:


Vessel Name		Flag
McDermott Derrick Barge No. 16		U.S.A.
McDermott Derrick Barge No. 26		Panama
McDermott Derrick Barge No. 27		Panama
McDermott Derrick Barge No. 30		Panama
McDermott Derrick Barge No. 50		Panama
McDermott LB 32		Panama
DB 101		Panama
DLB KP1		Panama
Intermac 650		Panama
Acadian Sea		Barbados
Agile		Barbados
Bold Endurance		Barbados
Thebaud Sea		Canada (bareboat registered in Barbados)
Venture Sea		Canada
Emerald Sea		Barbados


Burin Sea		Canada
Panuke Sea		Canada
Mariner Sea		Canada
Trinity Sea		Canada
Hebron Sea		Canada

“Mortgages” means (a) the fee or leasehold mortgages or deeds of trust, assignments of leases and rents and other security documents granting a Lien on any Mortgaged Property to secure the Obligations and (b) the mortgages and other security documents granting a Lien on any Mortgaged Vessel to secure the Obligations, in the case of each of clauses (a) and (b) each in form and substance reasonably satisfactory to the Collateral Agent, as the same may be amended, supplemented, replaced or otherwise modified from time to time in accordance with this Agreement.

“Multiemployer Plan” means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to which the Borrower, any of its Subsidiaries, any Guarantor or any ERISA Affiliate has any obligation or liability, contingent or otherwise.

“Net Cash Proceeds” means proceeds received by the Borrower or any Restricted Subsidiary after the Effective Date in cash or Cash Equivalents from any Asset Sale referenced in Section 8.4(i) (Sale of Assets) net of (a) the reasonable cash costs of sale, assignment, sale-leaseback or other disposition and (b) taxes paid or reasonably estimated to be payable as a result thereof (including, for the avoidance of doubt, as a result of any distribution of such proceeds to the Loan Parties), provided, however, that evidence of each of clauses (a) and (b) above is provided to the Administrative Agent in form and substance reasonably satisfactory to it.

“New Borrower” has the meaning specified in the preamble to this Agreement.

“New Revolving Commitments” has the meaning specified in Section 2.18 (Incremental Revolving Commitments).

“New Revolving Loan” has the meaning specified in Section 2.18 (Incremental Revolving Commitments).

“New Lender” has the meaning specified in Section 2.18 (Incremental Revolving Commitments).

“Non-Consenting Lender” has the meaning specified in Section 11.1(c) (Amendments, Waivers, Etc.).

“Non-Recourse Indebtedness” means Indebtedness of a Subsidiary of the Borrower (in each case that is not a Loan Party) (a) that is on terms and conditions reasonably satisfactory to the Administrative Agent, (b) that is not, in whole or in part, Indebtedness of any Loan Party (and for which no Loan Party has created, maintained or assumed any Guaranty Obligation) and for which no holder thereof has or could have upon the occurrence of any contingency, any recourse against any Restricted Subsidiary or the assets thereof (other than the Stock or Stock Equivalents issued by the Subsidiary

primarily obligated on such Indebtedness that are owned by a Restricted Subsidiary) for the repayment of such Indebtedness, and (c) owing to an unaffiliated third-party (which for the avoidance of doubt does not include the Borrower, any Subsidiary thereof, any other Loan Party, any Joint Venture (or owner of any interest therein) and any Affiliate of any of them).

“Non-U.S. Financial Institution” means each Lender or the Administrative Agent that is not a United States person as defined in Section 7701(a)(30) of the Code.

“Note” means a promissory note of the Borrower payable to any Lender and its registered assigns in a principal amount equal to the amount of such Lender’s Revolving Commitment evidencing the aggregate Indebtedness of the Borrower to such Lender resulting from the Revolving Loans (and, if such Lender is also the Swing Loan Lender, Swing Loans) owing to such Lender.

“Notice of Borrowing” has the meaning specified in Section 2.2(a) (Borrowing Procedures).

“Notice of Conversion or Continuation” has the meaning specified in Section 2.11 (Conversion/Continuation Option).

“Obligations” means the Loans, the Letter of Credit Obligations and all other amounts, obligations, covenants and duties owing by the Borrower and the other Loan Parties to the Agents, any Lender, any Issuer, any Affiliate of any of them or any Indemnitee, of every type and description (whether by reason of an extension of credit, opening or amendment of a letter of credit or payment of any draft drawn thereunder, loan, guaranty, indemnification, foreign exchange or currency swap transaction, interest rate hedging transaction or otherwise), present or future, arising under (a) this Agreement or any other Loan Document, (b) any Treasury Management Arrangements that are (i) in effect on the Effective Date with a counterparty that is the Administrative Agent, a Lender or any Affiliate of either of the foregoing or (ii) entered into after the Effective Date with a counterparty that was, at the time such Treasury Management Agreements were entered into, the Administrative Agent, a Lender or any Affiliate of either of the foregoing or (c) any Hedging Contract that is (i) in effect on the Effective Date with a counterparty that is the Administrative Agent, a Lender or any Affiliate of either of the foregoing or (ii) entered into after the Effective Date with a counterparty that was, at the time such Hedging Contract was entered into, the Administrative Agent, a Lender or any Affiliate of either of the foregoing, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising and however acquired and whether or not evidenced by any note, guaranty or other instrument or for the payment of money, including all letter of credit and other fees (including, the Revolving Commitment Fee and the Fronting Fee), interest (including post-petition interest, whether or not allowed in a bankruptcy proceeding), charges, expenses, attorneys’ fees and disbursements and other sums chargeable to the Borrower under this Agreement or any other Loan Document and all obligations of the Borrower under any Loan Document to provide cash collateral for Letter of Credit Obligations.

“Original Currency” has the meaning specified in Section 11.19 (Judgment Currency).

“Other Currency” has the meaning specified in Section 11.19 (Judgment Currency).

“Other Taxes” has the meaning specified in Section 2.16(b) (Taxes).

“Outstandings” means, at any particular time, the sum of the principal amount of the Loans outstanding at such time and the Letter of Credit Obligations outstanding at such time.

“Participant” has the meaning specified in Section 11.2(d) (Assignments and Participations).

“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.

“Performance Guarantee” of any Person means (a) any letter of credit, bankers acceptance, surety bond, performance bond, bank guarantee or other similar obligation issued for the account of such Person to support only trade payables or nonfinancial performance obligations of such Person, (b) any letter of credit, bankers acceptance, surety bond, performance bond, bank guarantee or other similar obligation issued for the account of such Person to support any letter of credit, bankers acceptance, surety bond, performance bond, bank guarantee or other similar obligation issued for the account of a Subsidiary or joint venture of such Person to support only trade payables or non-financial performance obligations of such Subsidiary or joint venture, and (c) any parent company guarantee or other direct or indirect liability, contingent or otherwise, of such Person with respect to trade payables or non-financial performance obligations of a Subsidiary or joint venture of such Person, if the purpose of such Person in incurring such liability is to provide assurance to the obligee that such contractual obligation will be performed, or that any agreement relating thereto will be complied with.

“Performance Guarantee Collateral” has the meaning specified in Section 8.2(i) (Liens, Etc.).

“Performance Letter of Credit” means (a) a letter of credit issued to secure ordinary course performance obligations in connection with marine installation, project engineering, procurement, construction, maintenance and other similar projects (including projects about to be commenced) or bids for prospective marine installation, project engineering, procurement, construction, maintenance and other similar projects, and (b) a letter of credit issued to back a bank guarantee, surety bond, performance bond or other similar obligations issued to support ordinary course performance obligations in connection with marine installation, project engineering, procurement, construction, maintenance and other similar projects (including projects about to be commenced) or bids for prospective marine installation, project engineering, procurement, construction, maintenance and other similar projects. The Existing Letters of Credit set forth on the attached Schedule VIII (Performance Letters of Credit) are Performance Letters of Credit.

“Permit” means any permit, approval, authorization, license, variance or permission required from a Governmental Authority under an applicable Requirement of Law.

“Permitted Acquisition” means a non-hostile Acquisition subject to the satisfaction of each of the following conditions:

(a) if the consideration (excluding performance-based contingent consideration (including, without limitation, earn-out payments and royalty payments)) in respect of any such Permitted Acquisition is in excess of $10,000,000.00, the Administrative Agent shall receive prior written notice of such Permitted Acquisition, which notice shall include, without limitation, a description of such Permitted Acquisition with such detail as the Administrative Agent shall reasonably require;

(b) following such Permitted Acquisition, the Borrower would be in compliance with Section 8.7 (Change in Nature of Business);

(c) after giving effect to such Permitted Acquisition, the Available Credit plus any unrestricted cash and Cash Equivalents of the Borrower and its Restricted Subsidiaries shall not be less than $150,000,000.00;

(d) within 30 days (or, in respect of real estate matters, 45 days) after the closing of such Permitted Acquisition, the Borrower (or the Restricted Subsidiary making such Permitted Acquisition) and the target of such Permitted Acquisition (unless it is a Subsidiary that has not satisfied the Threshold Amount) shall have executed such documents and taken such actions as may be required under Sections Section 7.11 (Additional Collateral and Guaranties) and Section 7.12 (Real Property);

(e) if such Permitted Acquisition involves the acquisition of one or more marine vessels, in each case having a Fair Market Value in excess of $10,000,000.00, such vessel or vessels, except in the case where acquired using Indebtedness permitted by Section 8.1(d) that is the subject of a Lien permitted under Section 8.2 (Liens, Etc.) (i) securing permitted Capital Leases or permitted purchase money Indebtedness incurred in connection with the acquisition of such marine vessel or (ii) existing at the time of (but not incurred in anticipation of) any such acquisition, shall within 20 Business Days of such acquisition, become Collateral pursuant to arrangements substantially similar to those made with respect to similar Mortgaged Vessels on the Effective Date; and

(f) at the time of such Permitted Acquisition and after giving effect thereto (and to any Indebtedness incurred or acquired in connection therewith), (i) no Default or Event of Default shall have occurred and be continuing, the Borrower shall have demonstrated compliance with Section 5.2 (Minimum Interest Coverage Ratio) on a pro forma basis as of the most recent Fiscal Quarter end for which Financial Statements are available, and the Borrower shall have demonstrated compliance with Section 5.1 (Maximum Leverage Ratio) on a pro forma basis as of the most recent Fiscal Quarter end for which Financial Statements are available as if such maximum Leverage Ratio were

0.25:1.00 more restrictive than as set forth in Section 5.1 and (ii) the statement set forth in Section 3.2(b)(i) (Representations and Warranties; No Defaults) shall be true.

“Person” means an individual, partnership, corporation (including a business trust), joint stock company, estate, trust, limited liability company, unincorporated association, joint venture or other entity, or a Governmental Authority.

“Pledge and Security Agreement” means the Pledge and Security Agreement dated as of the date hereof executed by the Borrower, each Guarantor and the Administrative Agent.

“Pledged Notes” has the meaning specified in the Pledge and Security Agreement.

“Pledged Stock” has the meaning specified in the Pledge and Security Agreement.

“Prime Rate” means the rate of interest per annum established from time to time by the Administrative Agent as its prime rate in effect at its principal office in New York City. Each change in the Prime Rate shall be effective on the date such change is announced as being effective.

“Projections” means those financial projections of the Borrower and its Subsidiaries delivered to the Administrative Agent by the Borrower (which projections contemplate the Spin) covering the Fiscal Years ending in 2010 through 2014, inclusive.

“Proposed Change” has the meaning specified in Section 11.1(c) (Amendments, Waivers, Etc.).

“Purchasing Lender” has the meaning specified in Section 11.7 (Sharing of Payments, Etc.).

“Ratable Portion” or “ratably” means, subject to adjustment as provided in Section 2.12(d) (Payments of Fees to Lenders), Section 2.13(e) (Payments and Computations, and Section 2.20(a)(iv) (Reallocation of Ratable Portions to Reduce Fronting Exposure), with respect to any Lender at any time, the percentage obtained by dividing (a) the Revolving Commitment of such Lender at such time by (b) the aggregate Revolving Commitments of all Lenders at such time; provided that if such Revolving Commitments have been terminated, then the Ratable Portion of such Lender shall be determined based on the Ratable Portions of such Lender, and of all other Lenders, immediately prior to such termination and after giving effect to any subsequent assignments made pursuant to the terms hereof.

“Real Property” means all Mortgaged Property and all other real property owned or leased from time to time by any Loan Party or any of its Restricted Subsidiaries.

“Register” has the meaning specified in Section 11.2(c) (Assignments and Participations).

“Reimbursement Date” has the meaning specified in Section 2.4(h) (Letters of Credit).

“Reimbursement Obligations” means all matured reimbursement or repayment obligations of the Borrower to any Issuer with respect to amounts drawn under Letters of Credit.

“Related Obligations” has the meaning specified in Section 10.8 (Collateral Matters Relating to Related Obligations).

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, representatives, attorneys, consultants, advisors and trustees of such Person and of such Person’s Affiliates.

“Release” means, with respect to any Person, any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration, in each case, of any Contaminant into the indoor or outdoor environment or into or out of any property owned by such Person, including the movement of Contaminants through or in the air, soil, surface water, ground water or property and, in each case, in violation of Environmental Law.

“Release Date” means a date after the Effective Date or after a Spring-Back Date upon which the Borrower has delivered to the Administrative Agent evidence reasonably satisfactory to the Administrative Agent that the Borrower has obtained a corporate credit rating from S&P of at least BBB- (with a stable outlook or better) and a corporate family rating from Moody’s of at least Baa3 (with a stable outlook or better).

“Remedial Action” means all actions required by any applicable Requirement of Law to (a) clean up, remove, treat or in any other way address any Contaminant in the indoor or outdoor environment, (b) prevent the Release or threat of Release or minimize the further Release so that a Contaminant does not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment or (c) perform pre-remedial studies and investigations and post-remedial monitoring and care.

“Requirement of Law” means, with respect to any Person, the common law and all federal, state, local and foreign laws, rules and regulations, orders, judgments, decrees and other determinations of any Governmental Authority or arbitrator, applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject, including, without limitation, foreign exchange control, United States foreign assets control, and currency reporting laws and regulations, now or hereafter applicable, and all licensing and other formalities, necessary for the import, export and transport of any property, including, without limitation, those required by the regulations of the Export Administration of the Bureau of Industry and Security.

“Requisite Lenders” means, at any time, Lenders having Revolving Exposure and unused Revolving Commitments representing at least a majority of the sum of all Revolving Exposure outstanding and unused Revolving Commitments at such time;

provided that the Revolving Commitments and Revolving Exposure of any Defaulting Lender shall be excluded for purposes of making a determination of Requisite Lenders.

“Responsible Officer” means, with respect to any Person, any of the principal executive officers, managing members or general partners of such Person but, in any event, with respect to financial matters, the chief financial officer, treasurer or controller of such Person.

“Restricted Payment” means:

(a) any dividend or any other distribution or payment, whether direct or indirect, on account of any Stock or Stock Equivalents of the Borrower or any of its Restricted Subsidiaries now or hereafter outstanding, except a dividend payable solely in Stock or Stock Equivalents (other than Disqualified Stock) or a dividend or distribution payable solely to the Borrower or one or more Guarantors;

(b) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any Stock or Stock Equivalents of the Borrower or any of its Subsidiaries now or hereafter outstanding other than one payable solely to the Borrower or one or more Guarantors;

(c) any payment or prepayment of principal, premium (if any), interest, fees (including fees to obtain any waiver or consent in connection with any Indebtedness) or other charges on, or redemption, purchase, retirement, defeasance, sinking fund or similar payment with respect to, any Indebtedness of the Borrower or any other Restricted Subsidiary that is contractually subordinated to any of the Obligations, other than a payment pursuant to the terms of the Global Intercompany Note (other than, until the effective time of the Spin, payments to the New Borrower or any of its Affiliates (other than the Initial Borrower and its Subsidiaries)) or any required payment, prepayment, redemption, retirement, purchase or other payments, in each case to the extent permitted to be made by the terms of such Indebtedness; and

(d) any Investment.

“Restricted Subsidiary” means a Subsidiary that is not an Unrestricted Subsidiary.

“Revolving Commitment” means, with respect to each Lender, the commitment of such Lender to make Revolving Loans or to participate in Letters of Credit and Swing Loans in the aggregate principal amount outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule I (Revolving Commitments) or in the Assignment and Acceptance pursuant to which such Lender becomes a party hereto, as such amount may be adjusted from to time pursuant to this Agreement. “Revolving Commitments” means the aggregate of such commitments for all Lenders, and the initial aggregate amount of the Revolving Commitments is $900,000,000.00.

“Revolving Commitment Fee” has the meaning specified in Section 2.12(a) (Revolving Commitment Fees).

“Revolving Exposure” means, with respect to any Lender, at any time, the sum of (a) the aggregate principal amount of the outstanding Revolving Loans and participation in Swing Loans held by such Lender at such time plus (b) such Lender’s Ratable Portion of the Letter of Credit Obligations at such time.

“Revolving Facility Termination Date” means the earliest of (a) the fourth anniversary of the Effective Date, (b) the date of termination of all the Revolving Commitments pursuant to Section 2.5 (Reduction and Termination of the Revolving Commitments) or Section 9.2 (Remedies) and (c) the date on which all the Obligations become due and payable pursuant to Section 9.2 (Remedies).

“Revolving Loan” has the meaning specified in Section 2.1 (The Revolving Commitments).

“S&P” means Standard & Poor’s Rating Services.

“SEC” means the U.S. Securities and Exchange Commission.

“Secured Parties” means the Lenders, the Issuers, each Agent and any other holder of any Obligation.

“Security” means any Stock, Stock Equivalent, voting trust certificate, bond, debenture, promissory note or other evidence of Indebtedness, whether secured, unsecured, convertible or subordinated, or any certificate of interest, share or participation in, or any temporary or interim certificate for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing, but shall not include any evidence of the Obligations.

“Selling Lender” has the meaning specified in Section 11.7 (Sharing of Payments, Etc.).

“Solvent” means, with respect to any Person, that the value of the assets of such Person (both at fair value and present fair saleable value) is, on the date of determination, greater than the total amount of liabilities (including contingent and unliquidated liabilities) of such Person as of such date and that, as of such date, such Person is able to pay all liabilities of such Person as such liabilities are expected to mature and does not have unreasonably small capital for its then current business activities. In computing the amount of contingent or unliquidated liabilities at any time, such liabilities shall be computed at the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

“Special Purpose Vehicle” means any special purpose funding vehicle identified as such in writing by any Lender to the Administrative Agent and controlled by that Lender.

“Spin” means the spin-off of Babcock by the New Borrower to the shareholders of the New Borrower.

“Spin Steps” means, collectively, the transactions and actions taken or to be taken on or before the effective date of the Spin to facilitate the Spin, which transactions and actions shall be: (a)(i) on substantially the terms set forth in the confidential PowerPoint slides prepared by Deloitte Tax LLP that were delivered to the Administrative Agent on April 23, 2010 (with non-material changes or other or additional non-material transactions, steps or terms that do not adversely impact the resulting financial condition of the New Borrower or any of its Subsidiaries being considered consistent with consummation “on substantially the same terms”), (ii) on other terms not materially adverse to the Lenders and approved by the Administrative Agent (such approval not to be unreasonably conditioned, withheld or delayed), or (iii) on other terms approved by the Requisite Lenders (such approval not to be unreasonably conditioned, withheld or delayed), and (b)(i) taken to consummate the Spin on substantially the terms set forth in the Form 10, dated March 12, 2010 (as amended on April 23, 2010) filed with the SEC (with non-material changes or other or additional non-material transactions, steps or terms that do not adversely impact the resulting financial condition of the New Borrower or any of its Subsidiaries being considered consistent with consummation “on substantially the same terms”), (ii) on other terms not materially adverse to the Lenders and approved by the Administrative Agent (such approval not to be unreasonably conditioned, withheld or delayed), or (iii) on other terms approved by the Requisite Lenders (such approval not to be unreasonably conditioned, withheld or delayed).

“Spring-Back Date” means the earliest date after the most recent Release Date on which (a) both (i) the Borrower’s corporate family rating from Moody’s is Ba1 or below and (ii) the Borrower’s corporate rating from S&P is BB+ or below, (b) the Borrower’s corporate family rating from Moody’s is Ba2 or below (regardless of the corporate rating from S&P at such time), or (c) the Borrower’s corporate rating from S&P is BB or below (regardless of the corporate family rating from Moody’s at such time). For purposes of the foregoing, if only one of the ratings in the preceding sentence is available at any time, such rating (or its equivalent for the other agency) shall apply for both Moody’s and S&P.

“Stock” means shares of capital stock (whether denominated as common stock or preferred stock), partnership or membership interests, equity participations or other equivalents (regardless of how designated) of or in a corporation, partnership, limited liability company or similar business entity, whether voting or non-voting.

“Stock Equivalents” means all securities convertible into or exchangeable for Stock and all warrants, options or other rights to purchase or subscribe for any Stock, whether or not presently convertible, exchangeable or exercisable.

“Subsidiary” means, (a) with respect to any Person, a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person, and (b) with respect to the Borrower, prior

to the effective time of the Spin, each Transferred Subsidiary that the New Borrower owns, directly or indirectly, a majority of the Stock having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) of such Transferred Subsidiary. Unless otherwise specified, all references herein to a “Subsidiary”, “Restricted Subsidiary”, “Restricted Subsidiaries” or “Subsidiaries” shall refer to a Subsidiary, Restricted Subsidiary, Restricted Subsidiaries or Subsidiaries of the Borrower.

“Swing Loan” has the meaning specified in Section 2.3 (Swing Loans).

“Swing Loan Borrowing” means a borrowing consisting of a Swing Loan.

“Swing Loan Lender” means CA CIB or any other Lender that becomes the Administrative Agent or agrees, with the approval of the Administrative Agent and the Borrower, to act as Swing Loan Lender hereunder.

“Swing Loan Request” has the meaning specified in Section 2.3(b) (Swing Loans).

“Syndication Agent” means BNP Paribas in its capacity as syndication agent.

“Tax Affiliate” means, with respect to any Person, (a) any Subsidiary of such Person, and (b) any Affiliate of such Person with which such Person files or is eligible to file U.S. federal income tax returns.

“Tax Return” has the meaning specified in Section 4.8 (Taxes).

“Taxes” has the meaning specified in Section 2.16 (Taxes).

“Threshold Amount” means, on any date of determination, that such Subsidiary or Subsidiaries, together with its Subsidiaries, had either (a) $2,000,000.00 or more of EBITDA during the four-Fiscal Quarter period most recently ended or (b) had assets the aggregate net book value of which was $2,000,000.00 or more.

“Title Insurance Company” has the meaning specified in Section 3.1(k) (Title Insurance).

“Title IV Plan” means a pension plan, other than a Multiemployer Plan, covered by Title IV of ERISA and to which the Borrower, any of its Subsidiaries, any Guarantor or any ERISA Affiliate has any obligation or liability (contingent or otherwise).

“Transferred Joint Venture” means any Person listed on Schedule V hereto.

“Transferred Subsidiary” means any Person listed on Schedule VI hereto.

“Treasury Management Arrangement” means any arrangement for credit card, cash management, clearing house, wire transfer, depository, treasury or investment services in connection with any transfer or disbursement of funds through an automated

clearinghouse or on a same day or immediate or accelerated availability basis (including all monetary obligations, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise of the Borrower or any of its Subsidiaries arising out of any cash management, clearing house, wire transfer, depository, treasury or investment services) provided to the Borrower or any of its Subsidiaries. The designation of any such arrangement as a Treasury Management Arrangement shall not create in favor of the counterparty that is a party thereto any rights in connection with the management, enforcement or release of any Collateral.

“Treasury Regulations” means the final and temporary (but not proposed) income tax regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

“UCC” means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of New York; provided, however, in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of the security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of definitions related to such provisions.

“Unrestricted Subsidiary” means:

(a) any Captive Insurance Subsidiary;

(b) any Cobia Entity; and

(c) any other Subsidiary of the Borrower (other than, after the effective time of the Spin, the Initial Borrower) that, either on the Effective Date is listed on Schedule VII hereto as an Unrestricted Subsidiary or after the Effective Date is designated by the Board of Directors of the Borrower as an Unrestricted Subsidiary pursuant to a resolution passed by the board of directors of the Borrower, but only to the extent that:

(i) such Subsidiary has no Indebtedness other than Non-Recourse Indebtedness;

(ii) except as permitted pursuant to Section 8.8 (Transactions with Affiliates), such Subsidiary is not party to any agreement, contract, arrangement or understanding with the Borrower or any Restricted Subsidiary unless the terms of any such agreement or contract are, taken as a whole, no less favorable to the Borrower or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the Borrower;

(iii) except for equity contribution obligations in connection with Non-Recourse Indebtedness, such Subsidiary is a Person with respect to which neither the Borrower nor any of its Restricted Subsidiaries has any direct or

indirect obligation (i) to subscribe for additional Stock or Stock Equivalents or (ii) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results;

(iv) the aggregate Fair Market Value of all outstanding Investments owned by the Borrower and its Restricted Subsidiaries in the Subsidiary being so designated and any commitments to make any such Investments would be permitted under Section 8.5 (Restricted Payments) as of the time of the designation;

(v) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing;

(vi) immediately before and after such designation, the Borrower shall be in pro forma compliance with Article V (Financial Covenants) as of the most recent Fiscal Quarter end for which financial statements are available; and

(vii) such Subsidiary has not previously been designated as an Unrestricted Subsidiary.

Any designation of a Subsidiary of the Borrower as an Unrestricted Subsidiary after the Effective Date will be evidenced to the Administrative Agent by filing with the Administrative Agent a certified copy of the resolution passed by the board of directors of the Borrower giving effect to such designation and a certificate of a Responsible Officer of the Borrower certifying that such designation complied with the preceding conditions, and any such designation shall be effective as of the effective date of such certificate.

If, at any time, any Unrestricted Subsidiary (other than a Captive Insurance Subsidiary or a Cobia Entity) would fail to meet the requirements of clause (c)(i), (c)(ii), (c)(iii) or (c)(iv) above as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of this Agreement and the other Loan Documents and any Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of the Borrower as of such date and, if such Indebtedness is not permitted to be incurred as of such date pursuant to Section 8.1 (Indebtedness), the Borrower will be in default of such covenant.

The board of directors of the Borrower may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such designation will be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the Borrower of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation will only be permitted if (i) such Indebtedness is permitted pursuant to Section 8.1 (Indebtedness); and (ii) no Default or Event of Default would be in existence following such designation. Upon any such designation of an Unrestricted Subsidiary as a Restricted Subsidiary, the redesignated Subsidiary will become a Guarantor pursuant to and if required by Section 7.11 (Additional Collateral and Guaranties).

“USA Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended.

“Voting Stock” means Stock of any Person having ordinary power to vote in the election of members of the board of directors, managers, trustees or similar controlling Persons of such Person (irrespective of whether, at the time, Stock of any other class or classes of such entity shall have or might have voting power by reason of the happening of any contingency).

“Wholly-Owned” means, in respect of any Person, any Subsidiary of such Person, all of the Stock of which (other than director’s qualifying shares, and the like, as may be required by applicable law) is owned by such Person, either directly or indirectly through one or more Wholly-Owned Subsidiaries thereof.

“Withdrawal Liability” means, with respect to the Borrower, any of its Subsidiaries, any Guarantor or any ERISA Affiliate at any time, the aggregate liability incurred (whether or not assessed) with respect to all Multiemployer Plans pursuant to Section 4201 of ERISA.

Section 1.2 Computation of Time Periods

In this Agreement, in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and, where applicable, the words “to” and “until” each mean “to but excluding” and the word “through” means “to and including.”

Section 1.3 Accounting Terms and Principles

(a) Except as set forth below, all accounting terms not specifically defined herein shall be construed in conformity with GAAP and all accounting determinations required to be made pursuant hereto shall, unless expressly otherwise provided herein, be made in conformity with GAAP.

(b) If any change in the accounting principles used in the preparation of the most recent Financial Statements referred to in Section 6.1 (Financial Statements) is hereafter required or permitted by the rules, regulations, pronouncements and opinions of the Financial Accounting Standards Board or the American Institute of Certified Public Accountants (or any successors thereto) and such change is adopted by the Borrower without objection from the Borrower’s Accountants and results in a change in any of the calculations required by Article V (Financial Covenants) or VIII (Negative Covenants) had such accounting change not occurred, the parties hereto agree to enter into good faith negotiations in order to amend such provisions so as to equitably reflect such change with the desired result that the criteria for evaluating compliance with such covenants by the Borrower shall be the same after such change as if such change had not been made; provided, however, that no change in GAAP that would affect a calculation that measures compliance with any covenant contained in Article V (Financial

Covenants) or VIII (Negative Covenants) shall be given effect until such provisions are amended to reflect such changes in GAAP.

(c) Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to any election under Statement of Financial Account Standards 159 (or any other Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Borrower or any of its Subsidiaries at “fair value”, as defined therein.

Section 1.4 Certain Terms

(a) The words “herein,” “hereof” and “hereunder” and similar words refer to this Agreement as a whole, and not to any particular Article, Section, subsection or clause in this Agreement.

(b) Unless otherwise expressly indicated herein, (i) references in this Agreement to an Exhibit, Schedule, Article, Section, clause or sub-clause refer to the appropriate Exhibit or Schedule to, or Article, Section, clause or sub-clause in this Agreement, (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, and (iii) the words “above” and “below”, when following a reference to a clause or a sub-clause of any Loan Document, refer to a clause or sub-clause within, respectively, the same Section or clause.

(c) Each agreement defined in this Article I shall include all appendices, exhibits and schedules thereto. References in this Agreement to such agreement shall be to such agreement as so amended, restated, supplemented or modified, unless (i) the prior written consent of the Requisite Lenders is required hereunder for an amendment, restatement, supplement or other modification to any such agreement and such consent is not obtained or (ii) it is otherwise specified that such reference refers to such agreement as of a particular date.

(d) References in this Agreement to any statute shall be to such statute as amended or modified, together with any successor legislation, in each case in effect at the time any such reference is operative unless it is otherwise specified that such reference refers to such statute as of a particular date.

(e) The term “including” when used in any Loan Document means “including without limitation” except when used in the computation of time periods. The phrase “in the aggregate”, when used in any Loan Document, means “individually or in the aggregate,” unless otherwise expressly noted.

(f) Upon the appointment of any successor Administrative Agent pursuant to Section 10.6(a) (Successor Agents), the reference to CA CIB in the definition of Dollar Equivalent shall be deemed to refer to the financial institution then acting as the Administrative Agent or one of its Affiliates if it so designates.

ARTICLE II

THE LOANS AND LETTERS OF CREDIT

Section 2.1 The Revolving Commitments

On the terms and subject to the conditions contained in this Agreement, each Lender severally agrees to make loans (each a “Revolving Loan”) to the Borrower from time to time on any Business Day during the period from the Effective Date until the Revolving Facility Termination Date in Dollars in an aggregate principal amount at any time outstanding that will not result in such Lender’s Revolving Exposure exceeding such Lender’s Revolving Commitment. Within the limits of each Lender’s Revolving Commitment, amounts of Revolving Loans repaid may be reborrowed under this Section 2.1. The entire amount of the Revolving Commitments will be available in the form of letters of credit issued pursuant to Section 2.4 (Letters of Credit).

Section 2.2 Borrowing Procedures

(a) Each Borrowing shall be made on notice given by the Borrower to the Administrative Agent not later than 1:00 p.m. (New York time) (i) on the Business Day of the proposed Borrowing, in the case of a Borrowing of Base Rate Loans and (ii) three Business Days prior to the date of the proposed Borrowing in the case of a Borrowing of Eurodollar Rate Loans. Each such notice shall be in substantially the form of Exhibit C (Form of Notice of Borrowing) (a “Notice of Borrowing”) (or shall be made by telephone and the same information shall be confirmed promptly thereafter in writing), specifying (A) the date of such proposed Borrowing, (B) the aggregate amount of such proposed Borrowing, (C) whether any portion of the proposed Borrowing will be of Base Rate Loans or Eurodollar Rate Loans, (D) the initial Interest Period or Periods for any such Eurodollar Rate Loans, and (E) remittance instructions. The Loans shall be made as Base Rate Loans unless, subject to Section 2.14 (Special Provisions Governing Eurodollar Rate Loans), the Notice of Borrowing specifies that all or a portion thereof shall be Eurodollar Rate Loans. Each Borrowing of Revolving Loans shall be in an aggregate amount that is an integral multiple of $1,000,000.00 (or $500,000.00 with respect to Swing Loans) and shall be allocated pro rata in accordance with each Lender’s Revolving Commitment.

(b) Unless the Administrative Agent shall have received notice from a Lender prior to the date of any proposed Borrowing that such Lender shall not make available to the Administrative Agent such Lender’s Ratable Portion of such Borrowing (or any portion thereof), the Administrative Agent may assume that such Lender has made such Ratable Portion available to the Administrative Agent on the date of such Borrowing in accordance with this Section 2.2 and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If and to the extent that such Lender shall not have so made such Ratable Portion available to the Administrative Agent, such Lender and the Borrower severally agree to repay to the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such

amount is made available to the Borrower until the date such amount is repaid to the Administrative Agent, at (i) in the case of the Borrower, the interest rate applicable at the time to the Loans comprising such Borrowing and (ii) in the case of such Lender, the Federal Funds Rate for the first Business Day and thereafter at the interest rate applicable at the time to the Loans comprising such Borrowing. If such Lender shall repay to the Administrative Agent such corresponding amount, such corresponding amount so repaid shall constitute such Lender’s Loan as part of such Borrowing for purposes of this Agreement. If the Borrower shall repay to the Administrative Agent such corresponding amount, such payment shall not relieve such Lender of any obligation it may have hereunder to the Borrower.

(c) The failure of any Lender to make the Loan or any payment required by it on the date specified, including any payment in respect of its participation in Swing Loans and Letter of Credit Obligations, shall not relieve any other Lender of its obligations to make such Loan or payment on such date but no such other Lender shall be responsible for the failure of any Lender to make a Loan or payment required under this Agreement.

Section 2.3 Swing Loans

(a) On the terms and subject to the conditions contained in this Agreement, the Swing Loan Lender may, in its sole discretion, make loans (each a “Swing Loan”) otherwise available to the Borrower from time to time on any Business Day during the period from the Effective Date until the Revolving Facility Termination Date in an aggregate principal amount outstanding at any time not to exceed $30,000,000.00; provided, however, that, in no event, shall any Swing Loan be made in excess of the Available Credit. Each Swing Loan shall be a Base Rate Loan and shall in any event mature no later than the Revolving Facility Termination Date. Within the limits set forth in the first sentence of this clause (a), amounts of Swing Loans repaid may be reborrowed under this clause (a).

(b) In order to request a Swing Loan, the Borrower shall telecopy (or, if consented to by the Swing Loan Lender and the Administrative Agent, forward by electronic mail or similar means) to the Swing Loan Lender (with a copy to the Administrative Agent) a duly completed request in substantially the form of Exhibit D (Form of Swing Loan Request) (or shall make such request by telephone and promptly thereafter forward a written confirmation containing the same information), setting forth the requested amount and date of the Swing Loan (a “Swing Loan Request”), to be received by the Swing Loan Lender not later than 3:00 p.m. (New York City time) on the day of the proposed borrowing. Subject to the terms of this Agreement, the Swing Loan Lender shall make a Swing Loan available to the Borrower on the date of the relevant Swing Loan Request. The Swing Loan Lender shall not make any Swing Loan in the period commencing on the first Business Day after it receives written notice from the Administrative Agent or any Lender that one or more of the conditions precedent contained in Section 3.2 (Conditions Precedent to Each Loan and Letter of Credit) shall not on such date be satisfied, and ending when such conditions are satisfied. The Swing Loan Lender shall not otherwise be required to determine that, or take notice whether, the

conditions precedent set forth in Section 3.2 (Conditions Precedent to Each Loan and Letter of Credit) have been satisfied in connection with the making of any Swing Loan.

(c) The Swing Loan Lender shall notify the Administrative Agent in writing (which writing may be a telecopy or, if agreed to by the Administrative Agent, electronic mail) weekly, by no later than 11:00 a.m. (New York time) on the first Business Day of each week, of the aggregate principal amount of its Swing Loans then outstanding.

(d) The Swing Loan Lender may demand at any time that each Lender pay to the Administrative Agent, for the account of the Swing Loan Lender, in the manner provided in clause (e) below, such Lender’s Ratable Portion of all or a portion of the outstanding Swing Loans, which demand shall be made through the Administrative Agent, shall be in writing and shall specify the outstanding principal amount of Swing Loans demanded to be paid.

(e) The Administrative Agent shall forward each notice referred to in clause (c) above and each demand referred to in clause (d) above to each Lender on the day such notice or such demand is received by the Administrative Agent (except that any such notice or demand received by the Administrative Agent after 4:00 p.m. (New York time) on any Business Day or any such demand received on a day that is not a Business Day shall not be required to be forwarded to the Lenders by the Administrative Agent until the next succeeding Business Day), together with a statement prepared by the Administrative Agent specifying the amount of each Lender’s Ratable Portion of the aggregate principal amount of the Swing Loans stated to be outstanding in such notice or demanded to be paid pursuant to such demand, and, notwithstanding whether or not the conditions precedent set forth in Section 3.2 (Conditions Precedent to Each Loan and Letter of Credit) shall have been satisfied (which conditions precedent the Lenders hereby irrevocably waive), each Lender shall, before 11:00 a.m. (New York time) on the Business Day next succeeding the date of such Lender’s receipt of such written statement, make available to the Administrative Agent, in immediately available funds, for the account of the Swing Loan Lender, the amount specified in such statement. Upon such payment by a Lender, such Lender shall, except as provided in clause (f) below, be deemed to have made a Revolving Loan that is a Base Rate Loan to the Borrower. The Administrative Agent shall use such funds to repay the Swing Loans to the Swing Loan Lender. To the extent that any Lender fails to make all or part of such payment available to the Administrative Agent for the account of the Swing Loan Lender, the Borrower shall repay such Swing Loan on demand.

(f) Upon the occurrence of a Default or Event of Default under Section 9.1(f) (Events of Default), each Lender shall acquire, without recourse or warranty, an undivided participation in each Swing Loan otherwise required to be paid by such Lender pursuant to clause (e) above, which participation shall be in a principal amount equal to such Lender’s Ratable Portion of such Swing Loan, by paying to the Swing Loan Lender on the date on which such Lender would otherwise have been required to make a payment in respect of such Swing Loan pursuant to clause (e) above, in immediately available funds, an amount equal to such Lender’s Ratable Portion of

such Swing Loan. If all or part of such amount is not in fact made available by such Lender to the Swing Loan Lender on such date, the Swing Loan Lender shall be entitled to recover any such unpaid amount on demand from such Lender together with interest accrued from such date at the Federal Funds Rate for the first Business Day after such payment was due and thereafter at the rate of interest then applicable to Base Rate Loans for Revolving Loans.

(g) From and after the date on which any Lender (i) is deemed to have made a Revolving Loan pursuant to clause (e) above with respect to any Swing Loan or (ii) acquires an undivided participation interest in a Swing Loan pursuant to clause (f) above, the Swing Loan Lender shall promptly distribute to such Lender such Lender’s Ratable Portion of all payments of principal of and interest received by the Swing Loan Lender on account of such Swing Loan other than those received from a Lender pursuant to clause (e) or (f) above.

Section 2.4 Letters of Credit

(a) On the terms and subject to the conditions contained in this Agreement, each Issuer agrees to Issue one or more Letters of Credit at the request of, and for the account of, the Borrower to support obligations of the Borrower, any of its Subsidiaries, any Joint Ventures or, until the effective time of the Spin, any Person that will be a Subsidiary of the New Borrower upon completion of the Spin Steps, from time to time on any Business Day during the period commencing on the Effective Date and ending on the date that is 30 days before the Revolving Facility Termination Date; provided, however, that no Issuer shall Issue any Letter of Credit upon the occurrence of any of the following:

(i) any order, judgment or decree of any Governmental Authority or arbitrator shall purport by its terms to enjoin or restrain such Issuer from Issuing such Letter of Credit or any Requirement of Law applicable to such Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such Issuer shall prohibit, or request that such Issuer refrain from, the Issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such Issuer with respect to such Letter of Credit any restriction or reserve or capital requirement (for which such Issuer is not otherwise compensated) not in effect on the date of this Agreement or result in any unreimbursed loss, cost or expense that was not applicable, in effect or known to such Issuer as of the date of this Agreement and that such Issuer in good faith deems material to it;

(ii) such Issuer shall have received written notice from the Administrative Agent, any Lender or the Borrower, on or prior to the requested date of Issuance of such Letter of Credit, that one or more of the applicable conditions contained in Section 3.1 (Conditions Precedent to Effectiveness) (with respect to an Issuance on the Effective Date) or 3.2 (Conditions Precedent to Each Loan and Letter of Credit) is not then satisfied or duly waived in accordance with Section 11.1 (Amendments, Waivers, Etc.);

(iii) after giving effect to the Issuance of such Letter of Credit, the aggregate Outstandings would exceed the Revolving Commitments in effect at such time or the amount of Letters of Credit issued by such Issuer would exceed its Letter of Credit Issuer Commitment;

(iv) any fees due in connection with a requested Issuance have not been paid;

(v) such Letter of Credit is requested to be issued in a form that is not acceptable to such Issuer, in its sole discretion exercised in a commercially reasonable manner; or

(vi) with respect to any requested Letter of Credit denominated in an Alternative Currency, (A) the Issuer or the Administrative Agent shall not have approved such Issuance or (B) the Issuer receives notice from the Administrative Agent at or before 11:00 a.m. (New York time) on the date of the proposed Issuance of such Letter of Credit that, immediately after giving effect to the Issuance of such Letter of Credit, the sum of the Dollar Equivalent of the Letter of Credit Obligations at such time in respect of each Letter of Credit denominated in an Alternative Currency would exceed $150,000,000.00 on the date of such proposed Issuance.

None of the Lenders (other than the Issuers in their capacity as such) shall have any obligation to Issue any Letter of Credit. The Borrower, the Lenders and the Issuers acknowledge the issuance of the Existing Letters of Credit prior to the Effective Date and agree that such Existing Letters of Credit are hereby deemed to be Letters of Credit issued hereunder on the Effective Date.

(b) In no event shall the expiration date of any Letter of Credit be later than the earlier of (i) the date that is 12 months from the date of Issuance thereof or such later date as the applicable Issuer may agree in its sole discretion and (ii) the fifth Business Day prior to the Revolving Facility Termination Date or, with the approval of the applicable Issuer at its discretion, any date that is after the Revolving Facility Termination Date; provided, however, that any Letter of Credit with a fixed term may provide for the auto-renewal thereof for additional periods of not more than 12 months each; provided, further, however, that if any Issuance or renewal occurs during the 12 month period prior to the Revolving Facility Termination Date or the Borrower requests (and the applicable Issuer approves) the Issuance of a Letter of Credit that expires after the Revolving Facility Termination Date, then on or before the date that is 95 days prior to the Revolving Facility Termination Date (or on the date of such Issuance, if the date of such Issuance is later than the 95^th day prior to the Revolving Facility Termination Date and the relevant Issuer so consents), the Borrower shall provide cash collateral to the Collateral Agent in an amount equal to 105% of the face amount of each such Letter of Credit that expires after the Revolving Facility Termination Date (each such Letter of Credit an “Extended Letter of Credit”). On the Revolving Facility Termination Date and if all Obligations have been repaid in full, such Extended Letters of Credit shall for all purposes cease to be Letters of Credit hereunder and the obligations of the Lenders to

fund their Ratable Portions of such Extended Letters of Credit pursuant to clause (h) below shall be terminated except to the extent that any Letter of Credit has an expiration date after the Revolving Facility Termination Date and has not been cash collateralized as described above. After the Revolving Facility Termination Date and the repayment in full of all Obligations, the terms for release of such cash collateral shall be as agreed from time to time between the Borrower and such Issuer; provided that in the absence of such agreement between the Borrower and such Issuer, the terms of this Agreement shall, as between the Borrower and such Issuer, continue to govern the fees, costs and expenses payable in respect of such Extended Letters of Credit.

(c) In connection with the Issuance of each Letter of Credit, the Borrower shall give the relevant Issuer at least two Business Days’ (unless the relevant Issuer otherwise agrees) prior written notice, in substantially the form of Exhibit E (Form of Letter of Credit Request) (or in such other written or electronic form as is acceptable to the Issuer), of the requested Issuance of such Letter of Credit (a “Letter of Credit Request”). Such notice shall be irrevocable on and after the Issuance of such Letter of Credit (and, prior to such Issuance, may be revoked only with the consent of the Issuer) and shall specify the Issuer of such Letter of Credit, the stated amount of the Letter of Credit requested, the date of Issuance of such requested Letter of Credit, the date on which such Letter of Credit is to expire (which date shall be a Business Day), and the Person for whose benefit the requested Letter of Credit is to be issued. Unless the Issuer otherwise agrees, such notice, to be effective, must be received by the relevant Issuer not later than 1:00 p.m. (New York time) on the second Business Day prior to the requested Issuance of such Letter of Credit.

(d) Subject to the satisfaction of the conditions set forth in this Section 2.4, the relevant Issuer shall, on the requested date, Issue a Letter of Credit on behalf of the Borrower in accordance with such Issuer’s usual and customary business practices. No Issuer shall Issue any Letter of Credit in the period commencing on the first Business Day after it receives written notice from the Administrative Agent or any Lender that one or more of the conditions precedent contained in Section 3.2 (Conditions Precedent to Each Loan and Letter of Credit) shall not on such date be satisfied, and ending when such conditions are satisfied. The relevant Issuer shall not otherwise be required to determine that, or take notice whether, the conditions precedent set forth in Section 3.2 (Conditions Precedent to Each Loan and Letter of Credit) have been satisfied in connection with the Issuance of any Letter of Credit.

(e) If requested by the relevant Issuer, prior to the first Issuance of a Letter of Credit by such Issuer, and as a condition of such Issuance and of the participation of each Lender in the Letter of Credit Obligations arising with respect thereto, the Borrower shall have delivered to such Issuer a letter of credit reimbursement agreement, in such form as the Issuer may employ in its ordinary course of business for its own account (a “Letter of Credit Reimbursement Agreement”), signed by the Borrower, and such other documents or items as may be required pursuant to the terms thereof. In the event of any conflict between the terms of any Letter of Credit Reimbursement Agreement and this Agreement, the terms of this Agreement shall govern.

(f) Each Issuer shall:

(i) give the Administrative Agent written notice (or telephonic notice confirmed promptly thereafter in writing, which writing may be a telecopy or, if consented to by the Administrative Agent, electronic mail) of the Issuance or renewal of a Letter of Credit issued by it, of all drawings under a Letter of Credit issued by it, the payment (or the failure to pay when due) by the Borrower of any Reimbursement Obligation and of the cancellation, termination or expiration of any Letter of Credit (of which notice the Administrative Agent shall promptly notify each Lender);

(ii) upon the request of any Lender, furnish to such Lender copies of any Letter of Credit Reimbursement Agreement to which such Issuer is a party and such other documentation as may reasonably be requested by such Lender; and

(iii) no later than five Business Days following the last Business Day of each calendar quarter (commencing with the calendar quarter ending June 30, 2010), provide to the Administrative Agent (and the Administrative Agent shall provide a copy to each Lender requesting the same) and the Borrower a schedule of Letters of Credit issued by it, in form and substance reasonably satisfactory to the Administrative Agent, setting forth the aggregate Letter of Credit Obligations outstanding at the end of each calendar quarter and any information requested by the Borrower or the Administrative Agent relating thereto.

(g) Effective with respect to the Existing Letters of Credit upon the occurrence of the Effective Date, and otherwise effective immediately upon the Issuance by an Issuer of a Letter of Credit in accordance with the terms and conditions of this Agreement, each Issuer shall be deemed to have sold and transferred to each Lender and each Lender shall be deemed irrevocably and unconditionally to have purchased and received from each Issuer, without recourse or warranty, an undivided interest and participation, to the extent of such Lender’s Ratable Portion of the Revolving Commitments in such Letter of Credit and the obligations of the Borrower with respect thereto (including all Letter of Credit Obligations with respect thereto) and any security therefor and guaranty pertaining thereto.

(h) The Borrower agrees to pay to the Issuer of any Letter of Credit the amount of all Reimbursement Obligations owing to such Issuer under any Letter of Credit issued for its account in Dollars (or the Dollar Equivalent of such payment if such payment was made in an Alternative Currency) no later than the date (the “Reimbursement Date”) that is the next succeeding Business Day after the Borrower receives notice from such Issuer (or, if such notice is not received prior to 11:00 A.M. (New York Time) on any Business Day, then no later than 10:00 A.M. (New York Time) on the next succeeding Business Day) that payment has been made under such Letter of Credit, irrespective of any claim, set-off, defense or other right that the Borrower may have at any time against such Issuer or any other Person. If any Issuer makes any

payment under any Letter of Credit and the Borrower shall not have repaid such amount to such Issuer pursuant to this clause (h) or any such payment by the Borrower in respect thereof is rescinded or set aside for any reason, such Reimbursement Obligation shall be payable on demand with interest thereon computed at the rate of interest applicable during such period to Revolving Loans that are Base Rate Loans, and such Issuer shall promptly notify the Administrative Agent, and the Administrative Agent shall promptly notify each Lender, of such failure, and each Lender shall promptly and unconditionally pay to the Administrative Agent for the account of such Issuer the amount of such Lender’s Ratable Portion in Dollars (or the Dollar Equivalent thereof if such payment was made in an Alternative Currency) and in immediately available funds. If the Administrative Agent so notifies such Lender prior to 11:00 a.m. (New York time) on any Business Day, such Lender shall make available to the Administrative Agent for the account of such Issuer its Ratable Portion of the amount of such payment on such Business Day in immediately available funds as set forth in the immediately preceding sentence. Upon such payment by a Lender, such Lender shall, except during the continuance of a Default or Event of Default under Section 9.1(f) (Events of Default) and notwithstanding whether or not the conditions precedent set forth in Section 3.2 (Conditions Precedent to Each Loan and Letter of Credit) shall have been satisfied (which conditions precedent the Lenders hereby irrevocably waive), be deemed to have made a Revolving Loan to the Borrower in the principal amount of such payment. Whenever any Issuer receives from the Borrower a payment of a Reimbursement Obligation as to which the Administrative Agent has received for the account of such Issuer any payment from a Lender pursuant to this clause (h), such Issuer shall pay to the Administrative Agent and the Administrative Agent shall promptly pay to such Lender in immediately available funds, an amount equal to such Lender’s Ratable Portion of the amount of such payment adjusted, if necessary, to reflect the respective amounts the Lenders have paid in respect of such Reimbursement Obligation.

(i) The Borrower’s obligation to pay each Reimbursement Obligation and the obligations of the Lenders (except as otherwise set forth in the penultimate sentence of Section 2.4(b)) to make payments to the Administrative Agent for the account of the Issuers with respect to Letters of Credit shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement, under any and all circumstances whatsoever, including the occurrence of any Default or Event of Default, and irrespective of any of the following:

(i) any lack of validity or enforceability of any Letter of Credit or any Loan Document, or any term or provision therein;

(ii) any amendment or waiver of or any consent to departure from all or any of the provisions of any Letter of Credit or any Loan Document;

(iii) the existence of any claim, set-off, defense or other right that the Borrower, any other party guaranteeing, or otherwise obligated with, the Borrower, any Subsidiary or other Affiliate thereof or any other Person may at any time have against the beneficiary under any Letter of Credit, any Issuer, the Administrative Agent, any Lender or any other Person, whether in connection

with this Agreement, any other Loan Document or any other related or unrelated agreement or transaction;

(iv) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;

(v) payment by the Issuer under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit; or

(vi) any other act or omission to act or delay of any kind of the Issuer, the Lenders, the Administrative Agent or any other Person or any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section 2.4, constitute a legal or equitable discharge of the Borrower’s obligations hereunder.

Any action taken or omitted to be taken by the relevant Issuer under or in connection with any Letter of Credit, if taken or omitted in the absence of gross negligence or willful misconduct, shall not put such Issuer under any resulting liability to the Borrower or any Lender. In determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof, the Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary and, in making any payment under any Letter of Credit, the Issuer may rely exclusively on the documents presented to it under such Letter of Credit as to any and all matters set forth therein, including reliance on the amount of any draft presented under such Letter of Credit, whether or not the amount due to the beneficiary thereunder equals the amount of such draft and whether or not any document presented pursuant to such Letter of Credit proves to be insufficient in any respect, if such document on its face appears to be in order, and whether or not any other statement or any other document presented pursuant to such Letter of Credit proves to be forged or invalid or any statement therein proves to be inaccurate or untrue in any respect whatsoever. Any noncompliance in any immaterial respect of the documents presented under such Letter of Credit with the terms thereof shall, in any case, be deemed not to constitute willful misconduct or gross negligence of the Issuer. Notwithstanding the foregoing, nothing in this clause (i) shall be deemed to release any Issuer from liability with respect to its gross negligence or willful misconduct.

(j) If and to the extent any Lender shall not have so made its Ratable Portion of the amount of the payment required by clause (h) above available to the Administrative Agent for the account of an Issuer, such Lender agrees to pay to the Administrative Agent for the account of such Issuer forthwith on demand any amount so unpaid together with interest thereon, for the first Business Day after payment was first due at the Federal Funds Rate, and thereafter until such amount is repaid to the Administrative Agent for the account of such Issuer, at the rate per annum applicable to Base Rate Loans for Revolving Loans. The failure of any Lender to make available to the Administrative Agent for the account of an Issuer its Ratable Portion of any such

payment shall not relieve any other Lender of its obligation hereunder to make available to the Administrative Agent for the account of such Issuer its Ratable Portion of any payment on the date such payment is to be made, but no Lender shall be responsible for the failure of any other Lender to make available to the Administrative Agent for the account of the Issuer such other Lender’s Ratable Portion of any such payment.

(k) The Administrative Agent shall determine the Dollar Equivalent of the maximum stated amount of each Letter of Credit denominated in an Alternative Currency and each obligation due with respect thereto, and a determination thereof by the Administrative Agent shall be conclusive absent manifest error. The Dollar Equivalent of each Reimbursement Obligation with respect to a drawn Letter of Credit shall be calculated on the date the Issuer pays the draw giving rise to such Reimbursement Obligation. The Administrative Agent shall determine or redetermine the Dollar Equivalent of the maximum stated amount of each Letter of Credit denominated in an Alternative Currency, as applicable, on the date of each Issuance of such Letter of Credit and at any time, in the Administrative Agent’s sole discretion. The Administrative Agent may determine or redetermine the Dollar Equivalent of any Letter of Credit denominated in an Alternative Currency at any time upon request of any Lender or Issuer.

(l) If the Issuer of a Letter of Credit is not the Person acting as Administrative Agent, the Borrower shall furnish the Administrative Agent with (i) a copy of such Letter of Credit promptly upon the Issuance or renewal of such Letter of Credit and (ii) a copy of any amendment to such Letter of Credit promptly upon the effectiveness of such amendment.

(m) Notwithstanding anything in this Agreement to the contrary, no Issuer shall be under any obligation to Issue any Letter of Credit if any Lender is at that time a Defaulting Lender, unless the Issuer has entered into arrangements, including the delivery of cash collateral, satisfactory to the Issuer (in its sole discretion) with the Borrower or such Lender to eliminate the Issuer’s actual or potential Fronting Exposure (after giving effect to Section 2.20(a)(iv) (Reallocation of Ratable Portions to Reduce Fronting Exposure)) with respect to the Defaulting Lender arising from either the Letter of Credit then proposed to be Issued or that Letter of Credit and all other Letter of Credit Obligations as to which the Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion.

Unless otherwise expressly agreed by the applicable Issuer and the Borrower when a Letter of Credit is Issued (including any such agreement applicable to an Existing Letter of Credit), (i) the rules of the ISP shall apply to each standby Letter of Credit and (ii) the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce at the time of Issuance shall apply to each commercial Letter of Credit.

Section 2.5 Reduction and Termination of the Revolving Commitments

(a) The Borrower may, upon at least three Business Days’ prior notice to the Administrative Agent, terminate in whole or reduce in part the unused portions of the Revolving Commitments; provided, however, that (i) each partial reduction shall be in an aggregate amount that is an integral multiple of $5,000,000.00 and (ii) each such reduction shall be made ratably in accordance with each Lender’s Revolving Commitment. A notice of termination of the Revolving Commitments may state that such notice is conditioned upon the effectiveness of other credit facilities, and if any notice so states it may be revoked by the Borrower by notice to the Administrative Agent on or prior to the date specified for the termination of the Revolving Commitments that the refinancing condition has not been met and the termination is to be revoked (it being understood that any Loans outstanding at the time of such notice or drawn thereafter will, upon such revocation, be continued as Base Rate Loans and, thereafter, may be converted to Eurodollar Rate Loans pursuant to Section 2.11 (Conversion/Continuation Option)).

(b) Any reduction of Revolving Commitments pursuant to Section 2.9(b) Mandatory Prepayments) shall be applied as follows:

first, to prepay the Swing Loans to the full extent thereof and to permanently reduce the Revolving Commitments by the amount of such prepayment;

second, to prepay the Revolving Loans to the full extent thereof and to further permanently reduce the Revolving Commitments by the amount of such prepayment;

third, to pay outstanding Reimbursement Obligations with respect to Letters of Credit and to further permanently reduce the Revolving Commitments by the amount of such payment;

fourth, to cash collateralize Letters of Credit and to further permanently reduce the Revolving Commitments by the amount of such cash collateralization; and

fifth, to further permanently reduce the Revolving Commitments to the full extent thereof.

Section 2.6 Repayment of Loans

The Borrower promises to repay (in cash, in full and in immediately available funds) the entire unpaid principal amount of the Revolving Loans and the Swing Loans on the Revolving Facility Termination Date (it being understood that other provisions of this Agreement may require all or part of such Obligations to be repaid earlier).

Section 2.7 Evidence of Debt

(a) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing Indebtedness of the Borrower to such Lender resulting from each Loan of such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement.

(b) The Administrative Agent shall maintain accounts in accordance with its usual practice in which it shall record (i) the amount of each Loan made and, if a Eurodollar Rate Loan, the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable by the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder from the Borrower, whether such sum constitutes principal or interest (and the type of Loan to which it applies), fees, expenses or other amounts due under the Loan Documents and each Lender’s share thereof, if applicable.

(c) The entries made in the accounts maintained pursuant to clauses (a) and (b) above shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations recorded therein; provided, however, that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligations of the Borrower to repay the Loans in accordance with their terms.

(d) Notwithstanding any other provision of this Agreement, if any Lender requests that the Borrower execute and deliver a promissory note or notes payable to such Lender in order to evidence the Indebtedness owing to such Lender by the Borrower hereunder, the Borrower shall promptly execute and deliver a Note or Notes to such Lender evidencing any Loans of such Lender, substantially in the form of Exhibit B (Form of Promissory Note).

Section 2.8 Optional Prepayments

The Borrower may, at any time, prepay the outstanding principal amount of the Loans and Swing Loans in whole or in part; provided, however, that if any prepayment of any Eurodollar Rate Loan is made by the Borrower other than on the last day of an Interest Period for such Loan, the Borrower shall also pay any amounts owing pursuant to Section 2.14(e) (Breakage Costs); provided, further, that each partial prepayment shall be in an aggregate principal amount that is an integral multiple of $1,000,000.00. Upon the giving of such notice of prepayment, the principal amount of Loans specified to be prepaid shall become due and payable on the date specified for such prepayment. A notice of prepayment of the outstanding principal amount of the Loans and Swing Loans in whole or in part may state that such notice is conditioned upon the effectiveness of other credit facilities, and if any notice so states it may be revoked by the Borrower by notice to the Administrative Agent on or prior to the date specified for such prepayment that the refinancing condition has not been met and the notice of such prepayment is to be revoked (it being understood that any Loans outstanding at the time of such notice or drawn thereafter will, upon such revocation, be continued as Base Rate Loans and,

thereafter, may be converted to Eurodollar Rate Loans pursuant to Section 2.11 (Conversion/Continuation Option)).

Section 2.9 Mandatory Prepayments

(a) If, at any time, the aggregate principal amount of Outstandings exceeds the Revolving Commitments at such time, the Borrower shall forthwith prepay the Swing Loans first and then the Revolving Loans then outstanding in an amount equal to such excess. If any such excess remains after repayment in full of the aggregate outstanding Swing Loans and Revolving Loans, the Borrower shall provide cash collateral for the Letter of Credit Obligations in the manner set forth in Section 9.3 (Actions in Respect of Letters of Credit) in an amount equal to 105% of such excess.

(b) Upon receipt by the Borrower or any of its Restricted Subsidiaries of any insurance proceeds pursuant to clause (iii) of the last sentence of Section 7.5 (Maintenance of Insurance) or Net Cash Proceeds pursuant to Section 8.4(i) (Sale of Assets), such amounts shall be applied to reduce Revolving Commitments in accordance with Section 2.5(b) (Reduction and Termination of the Revolving Commitments).

Section 2.10 Interest

(a) Rate of Interest. All Loans and the outstanding amount of all other Obligations shall bear interest, in the case of Loans, on the unpaid principal amount thereof from the date such Loans are made and, in the case of such other Obligations, from the date such other Obligations are due and payable until, in all cases, paid in full, except as otherwise provided in clause (c) below, as follows:

(i) if a Base Rate Loan or such other Obligation, at a rate per annum equal to the sum of (A) the Base Rate as in effect from time to time plus (B) the Applicable Margin for Base Rate Loans; and

(ii) if a Eurodollar Rate Loan, at a rate per annum equal to the sum of (A) the Eurodollar Rate for such Eurodollar Rate Loan determined for the applicable Interest Period plus (B) the Applicable Margin for Eurodollar Rate Loans in effect from time to time during such Interest Period.

(b) Interest Payments. (i) Interest accrued on each Base Rate Loan shall be payable in arrears (A) on the last Business Day of each calendar quarter and (B) if not previously paid in full, at maturity (whether by acceleration or otherwise) of such Base Rate Loan, (ii) interest accrued on each Eurodollar Rate Loan shall be payable in arrears (A) on the last day of each Interest Period applicable to such Loan and, if such Interest Period has a duration of more than three months, on each day during such Interest Period occurring every three months from the first day of such Interest Period, (B) upon the payment or prepayment thereof in full or in part and (C) if not previously paid in full, at maturity (whether by acceleration or otherwise) of such Eurodollar Rate Loan and (iii) interest accrued on the amount of all other Obligations shall be payable on demand from and after the time such Obligation becomes due and payable (whether by acceleration or otherwise).

(c) Default Interest. Notwithstanding the rates of interest specified in clause (a) above or elsewhere herein, effective immediately upon the occurrence of an Event of Default and for as long thereafter as such Event of Default shall be continuing, the interest rate otherwise in effect shall, upon the election of the Requisite Lenders (except if an Event of Default has occurred under Section 9.1(a) or (f) (Events of Default), in which case such increase shall be immediate) increase 2.00% per annum.

(d) Additional Reserve Requirements. The Borrower shall pay to each Lender, (i) as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits (currently known as “Eurocurrency liabilities”), additional interest on the unpaid principal amount of each Eurodollar Rate Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive), and (ii) as long as such Lender shall be required to comply with any reserve ratio requirement or analogous requirement of any other central banking or financial regulatory authority imposed in respect of the maintenance of the Revolving Commitments or the funding of the Eurodollar Rate Loans, such additional costs (expressed as a percentage per annum and rounded upwards, if necessary, to the nearest five decimal places) equal to the actual costs allocated to such Revolving Commitment or Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive), which in each case shall be due and payable on each date on which interest is payable on such Loan provided the Borrower shall have received at least 10 days’ prior notice (with a copy to the Administrative Agent) of such additional interest or costs from such Lender. If a Lender fails to give notice 10 days prior to the relevant interest payment date, such additional interest or costs shall be due and payable 10 days from receipt of such notice.

Section 2.11 Conversion/Continuation Option

(a) The Borrower may elect (i) at any time on any Business Day to convert Base Rate Loans (other than Swing Loans) or any portion thereof to Eurodollar Rate Loans and (ii) at the end of any applicable Interest Period, to convert Eurodollar Rate Loans or any portion thereof into Base Rate Loans or to continue such Eurodollar Rate Loans or any portion thereof for an additional Interest Period; provided, however, that the aggregate amount of the Eurodollar Rate Loans for each Interest Period must be in an amount that is an integral multiple of $1,000,000.00. Each conversion or continuation shall be allocated among the Loans of each Lender in accordance with such Lender’s Ratable Portion. Each such election shall be in substantially the form of Exhibit F (Form of Notice of Conversion or Continuation) (a “Notice of Conversion or Continuation”) and shall be made by giving the Administrative Agent at least three Business Days’ prior written notice (or telephonic notice promptly confirmed in writing) specifying, in each case, (A) the amount and type of Loan being converted or continued, (B) in the case of a conversion to or a continuation of Eurodollar Rate Loans, the applicable Interest Period and (C) in the case of a conversion, the date of conversion.

(b) The Administrative Agent shall promptly notify each Lender of its receipt of a Notice of Conversion or Continuation and of the options selected therein.

Notwithstanding the foregoing, no conversion in whole or in part of Base Rate Loans to Eurodollar Rate Loans, and no continuation in whole or in part of Eurodollar Rate Loans upon the expiration of any applicable Interest Period, shall be permitted at any time during which (i) a Default or an Event of Default shall have occurred and be continuing or (ii) the continuation of, or conversion into, a Eurodollar Rate Loan would violate any provision of Section 2.14 (Special Provisions Governing Eurodollar Rate Loans). If, within the time period required under the terms of this Section 2.11, the Administrative Agent does not receive a Notice of Conversion or Continuation from the Borrower containing a permitted election to continue any Eurodollar Rate Loans for an additional Interest Period or to convert any such Loans, then, upon the expiration of the applicable Interest Period, such Loans shall be automatically converted to Base Rate Loans. Each Notice of Conversion or Continuation shall be irrevocable.

Section 2.12 Fees

(a) Revolving Commitment Fees. The Borrower agrees to pay to the Administrative Agent for the account of each Lender (except for any Defaulting Lender) a commitment fee (the “Revolving Commitment Fee”), accruing at a rate per annum equal to the Applicable Commitment Fee Rate on the actual daily amount by which the Revolving Commitment of such Lender exceeds such Lender’s Ratable Portion of the sum of (x) the outstanding principal amount of Revolving Loans plus (y) the outstanding amount of the Letter of Credit Obligations during the period from the Effective Date until the Revolving Facility Termination Date, payable in arrears (A) on the third Business Day after the last Business Day of each calendar quarter (commencing with the calendar quarter ending June 30, 2010) and (B) on the Revolving Facility Termination Date.

(b) Letter of Credit Fees. The Borrower agrees to pay the following amounts with respect to Letters of Credit issued by any Issuer:

(i) to the Administrative Agent for the account of each Issuer of a Letter of Credit, with respect to each Letter of Credit issued by such Issuer, an issuance fee of 0.250% per annum (“Fronting Fees”) of the daily maximum amount available to be drawn under such Letter of Credit (in the case of Letters of Credit denominated in a currency other than Dollars, based on the Dollar Equivalent of such amount on the last Business Day of such calendar quarter), payable in arrears on the third Business Day after the last Business Day of each calendar quarter (commencing with the calendar quarter ending June 30, 2010) and (B) on the Revolving Facility Termination Date;

(ii) to the Administrative Agent for the account and ratable benefit of the Lenders (except for any Defaulting Lender that has not provided cash collateral satisfactory to the applicable Issuers pursuant to Section 2.4(m) (Letters of Credit)), with respect to each Letter of Credit (but excluding that portion of any Letter of Credit that has been cash collateralized by the Borrower pursuant to Section 2.4(m) (Letters of Credit) as a result of any Defaulting Lender), a fee (the “Letter of Credit Participation Fee”) accruing at a rate per annum equal to (A) the Applicable Margin for Eurodollar Rate Loans on the daily

maximum amount available to be drawn under such Letter of Credit if such Letter of Credit is a Financial Letter of Credit and (B) 50% of the Applicable Margin for Eurodollar Rate Loans on the daily maximum amount available to be drawn under such Letter of Credit if such Letter of Credit is a Performance Letter of Credit (in either case, in the case of any Letter of Credit denominated in a currency other than Dollars, based on the Dollar Equivalent of such amount on the last Business Day of such calendar quarter), payable in arrears (x) on the third Business Day after the last Business Day of each calendar quarter (commencing with the calendar quarter ending June 30, 2010) and (y) on the Revolving Facility Termination Date; provided, however, that during the continuance of an Event of Default, such fee shall be increased, upon the election of the Requisite Lenders (except if an Event of Default has occurred under Section 9.1(a) or (f) (Events of Default), in which case such increase shall be immediate), by 2% per annum and shall be payable on demand; and

(iii) to the Issuer of any Letter of Credit, with respect to the Issuance, amendment or transfer of each Letter of Credit and each drawing made thereunder, documentary and processing charges in accordance with such Issuer’s standard schedule for such charges in effect at the time of Issuance, amendment, transfer or drawing, as the case may be.

(c) Additional Fees. The Borrower has agreed to pay to the Administrative Agent and the Lenders additional fees, the amount and dates of payment of which are embodied in the Fee Letters.

(d) Payment of Fees to Lenders. The Administrative Agent hereby agrees to pay to each Lender such Lender’s Ratable Portion of the Revolving Commitment Fee and the Letter of Credit Participation Fee, as applicable, received by the Administrative Agent in its capacity as such, promptly following receipt of each of the same from (and only to the extent each such fee is received from) the Borrower or any other Loan Party; provided that (i) the Ratable Portion of any Revolving Commitment Fee shall be calculated without giving effect to the Revolving Commitment of any Defaulting Lender and (ii) any Letter of Credit Participation Fees otherwise payable for the account of a Defaulting Lender with respect to any Letter of Credit as to which neither such Defaulting Lender nor the Borrower has provided cash collateral satisfactory to the Issuer pursuant to Section 2.4(m) (Letters of Credit) shall be payable, to the maximum extent permitted by applicable law, to the other Lenders in accordance with the upward adjustments in their respective Ratable Portions allocable to such Letter of Credit pursuant to Section 2.20(a)(iv) (Reallocation of Ratable Portions to Reduce Fronting Exposure), with the balance of such fee, if any, payable to the Issuer for its own account.

Section 2.13 Payments and Computations

(a) The Borrower shall make each payment hereunder (including fees and expenses) not later than 3:00 p.m. (New York time) on the day when due, in Dollars, to the Administrative Agent at its address referred to in Section 11.8 (Notices, Etc.) in immediately available funds without set-off or counterclaim. The Administrative Agent

shall promptly thereafter cause to be distributed immediately available funds relating to the payment of principal, interest or fees to the Lenders, in accordance with the application of payments set forth in clauses (e) or (f) below, as applicable, for the account of their respective Applicable Lending Offices; provided, however, that amounts payable pursuant to Section 2.15 (Capital Adequacy), Section 2.16 (Taxes) or Section 2.14(c) (Increased Costs) or (d) (Illegality) shall be paid only to any affected Lender and amounts payable with respect to Swing Loans shall be paid only to the Swing Loan Lender. Payments received by the Administrative Agent after 3:00 p.m. (New York time) shall be deemed (in the Administrative Agent’s sole discretion) to be received on the next Business Day.

(b) All computations of interest and of fees shall be made by the Administrative Agent on the basis of the actual number of days elapsed (in each case calculated to include the first day but exclude the last day) (i) over a year of 365 or 366 days, as the case may be, in the case of interest accruing at the Base Rate when the Base Rate is determined by reference to the Prime Rate, and (ii) over a year of 360 days at all other times. Each determination by the Administrative Agent of an interest rate hereunder shall be conclusive and binding for all purposes, absent manifest error.

(c) Whenever any payment hereunder shall be stated to be due on a day other than a Business Day, the due date for such payment shall be extended to the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest or fees, as the case may be; provided, however, that if such extension would cause payment to be made in the next calendar month, such payment shall be made on the immediately preceding Business Day. All repayments of any Loans shall be applied as follows: first, to repay such Loans outstanding as Base Rate Loans and then, to repay such Loans outstanding as Eurodollar Rate Loans, with those Eurodollar Rate Loans having earlier expiring Interest Periods being repaid prior to those having later expiring Interest Periods.

(d) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due hereunder that the Borrower will not make such payment in full, the Administrative Agent may assume that the Borrower has made such payment in full to the Administrative Agent on such date and the Administrative Agent may, in reliance upon such assumption, cause to be distributed to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent that the Borrower shall not have made such payment in full to the Administrative Agent, each Lender shall repay to the Administrative Agent forthwith on demand such amount distributed to such Lender together with interest thereon at the Federal Funds Rate, for the first three Business Days, and, thereafter, at the rate applicable to Base Rate Loans, for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to the Administrative Agent.

(e) Subject to the provisions of clause (f) below, all payments and any other amounts received by the Administrative Agent from or for the benefit of the Borrower shall be applied as follows: first, to pay principal of, and interest on, any portion of the Loans the Administrative Agent may have advanced pursuant to the

express provisions of this Agreement on behalf of any Lender, for which the Administrative Agent has not then been reimbursed by such Lender or the Borrower, second, to pay all other Obligations then due and payable, and third, as the Borrower so designates. Payments in respect of Swing Loans received by the Administrative Agent shall be distributed to the Swing Loan Lender; payments in respect of other Loans received by the Administrative Agent shall, subject to Section 2.20 (Defaulting Lenders), be distributed to each Lender in accordance with such Lender’s Ratable Portion of the Revolving Commitments (calculated (i) in the case of principal payments, without giving effect to the Revolving Commitments of any Defaulting Lender that has not fully funded its share of the Loans being repaid and (ii) in the case of interest payments, without giving effect to the Revolving Commitments of any Defaulting Lender for the amount of interest payable in respect of Loans for which such Defaulting Lender has not fully funded its share of the Loan); and all payments of fees and all other payments in respect of any other Obligation shall be allocated among such of the Lenders and Issuers as are entitled thereto and, for such payments allocated to the Lenders, in proportion to their respective Ratable Portions as adjusted in accordance with Section 2.12(d) (Payment of Fees to Lenders) and Section 2.20(a)(iv) (Reallocation of Ratable Portions to Reduce Fronting Exposure).

(f) The Borrower hereby irrevocably waives the right to direct the application of any and all payments in respect of the Obligations and any net proceeds of Collateral after the occurrence and during the continuance of an Event of Default and agrees that, during such time, the Administrative Agent may, and, upon either (A) the written direction of the Requisite Lenders or (B) the acceleration of the Obligations pursuant to Section 9.2 (Remedies), shall apply all payments in respect of any Obligations and all other proceeds of Collateral in the following order:

First, to pay interest on and then principal of any portion of (i) the Loans that the Administrative Agent may have advanced on behalf of any Lender for which the Administrative Agent has not then been reimbursed by such Lender or the Borrower and (ii) the Reimbursement Obligations owed to any Issuer for which such Issuer has not then been reimbursed by any Lender or the Borrower;

Second, to pay interest on and then principal of any Swing Loan;

Third, to pay Obligations in respect of any expense reimbursements or indemnities (including fees and expenses in respect of cash management services) then due to the Administrative Agent;

Fourth, to pay Obligations in respect of any expense reimbursements or indemnities (including fees and expenses in respect of cash management services) then due to the Lenders and the Issuers;

Fifth, to pay Obligations in respect of any fees then due to the Administrative Agent, the Lenders and the Issuers;

Sixth, to pay interest then due and payable in respect of the Loans (ratably to the aggregate principal amount of such Loans) and Reimbursement Obligations; and

Seventh, to pay or prepay principal amounts on the Loans, Reimbursement Obligations and other Obligations and to provide cash collateral for outstanding Letter of Credit Undrawn Amounts in the manner described in Section 9.3 (Actions in Respect of Letters of Credit), ratably to the aggregate principal amount of such Loans, Reimbursement Obligations, other Obligations and Letter of Credit Undrawn Amounts;

provided, however, that if sufficient funds are not available to fund all payments to be made in respect of any Obligation described in any of clauses first through seventh above, the available funds being applied with respect to any such Obligation (unless otherwise specified in such clause) shall be allocated to the payment of such Obligations ratably, based on the proportion of the Administrative Agent’s and each Lender’s or Issuer’s interest in the aggregate outstanding Obligations described in such clauses. The order of priority set forth in clauses first through sixth above may at any time and from time to time be changed by the agreement of the Requisite Lenders without necessity of prior notice to or consent of or approval by the Borrower, any Secured Party that is not a Lender or Issuer or by any other Person that is not a Lender or Issuer. The order of priority set forth in clauses first through fifth above may be changed only with the prior written consent of the Administrative Agent in addition to the Requisite Lenders.

Section 2.14 Special Provisions Governing Eurodollar Rate Loans

(a) Determination of Interest Rate. The Eurodollar Rate for each Interest Period for Eurodollar Rate Loans shall be determined by the Administrative Agent pursuant to the procedures set forth in the definition of “Eurodollar Rate.” The Administrative Agent’s determination shall be presumed to be correct absent manifest error and shall be binding on the Borrower.

(b) Interest Rate Unascertainable, Inadequate or Unfair. If (i) the Administrative Agent determines that adequate and fair means do not exist for ascertaining the applicable interest rates by reference to which the Eurodollar Rate then being determined is to be fixed or (ii) the Requisite Lenders notify the Administrative Agent that the Eurodollar Rate for any Interest Period will not adequately reflect the cost to the Lenders of making or maintaining such Loans for such Interest Period or calendar quarter, the Administrative Agent shall forthwith so notify the Borrower and the Lenders, whereupon each Eurodollar Rate Loan shall automatically, on the last day of the current Interest Period for such Loan, convert into a Base Rate Loan and the obligations of the Lenders to make Eurodollar Rate Loans or to convert Base Rate Loans into Eurodollar Rate Loans shall be suspended until the Administrative Agent shall notify the Borrower

that the Requisite Lenders have determined that the circumstances causing such suspension no longer exist, which notice shall be given promptly following such determination. Thereafter, the Borrower’s right to request, and the Lenders’ obligations, if any, to make Eurodollar Rate Loans shall be restored.

(c) Increased Costs. If at any time any Lender or an Issuer determines that the introduction of, or any change in or in the interpretation of, any law, treaty or governmental rule, regulation or order (including any change by way of imposition or increase of reserve requirements included in determining the Eurodollar Rate) or the compliance by such Lender or such Issuer with any guideline, request or directive from any central bank or other Governmental Authority (whether or not having the force of law), shall (i) have the effect of increasing the cost to such Lender or such Issuer of agreeing to make or making, funding or maintaining any Eurodollar Rate Loan, or (ii) subject any Lender or any Issuer to any Tax of any kind whatsoever with respect to any Eurodollar Rate Loan, or change the basis of taxation of payments to such Lender or such Issuer in respect thereof (except for Taxes or Other Taxes indemnifiable pursuant to Section 2.16 (Taxes) or the imposition of, or any change in the rate of, any taxes, levies, imposts, deductions, charges, withholdings or liabilities excluded from the definition of Taxes), then the Borrower shall from time to time, upon demand by such Lender or such Issuer (with a copy of such demand to the Administrative Agent), pay to the Administrative Agent for the account of such Lender or such Issuer additional amounts sufficient to compensate such Lender or such Issuer for such increased cost. A certificate as to the amount of such increased cost shall be, together with supporting documents, submitted to the Borrower and the Administrative Agent by such Lender or such Issuer and shall be conclusive and binding for all purposes, absent manifest error. Notwithstanding the foregoing, except to the extent, if any, the change (or compliance) referred to in such certificate shall be retroactive, the Borrower shall not be required to compensate a Lender an Issuer pursuant to this clause (c) for any increased costs or reduction incurred more than 180 days prior to the date of such certificate. The Borrower shall pay such Lender or such Issuer the amount shown as due on any such certificate within 30 days after its receipt of the same.

(d) Illegality. Notwithstanding any other provision of this Agreement, if any Lender determines that the introduction of, or any change in or in the interpretation of, any law, treaty or governmental rule, regulation or order after the date of this Agreement shall make it unlawful, or any central bank or other Governmental Authority shall assert that it is unlawful, for any Lender or its Eurodollar Lending Office to make Eurodollar Rate Loans or to continue to fund or maintain Eurodollar Rate Loans, then, on notice thereof and demand therefor by such Lender to the Borrower through the Administrative Agent, (i) the obligation of such Lender to make or to continue Eurodollar Rate Loans and to convert Base Rate Loans into Eurodollar Rate Loans shall be suspended, and each such Lender shall make a Base Rate Loan as part of any requested Borrowing of Eurodollar Rate Loans and (ii) if the affected Eurodollar Rate Loans are then outstanding, the Borrower shall immediately convert each such Loan into a Base Rate Loan. If, at any time after a Lender gives notice under this Section 2.14(d), such Lender determines that it may lawfully make Eurodollar Rate Loans, such Lender shall promptly give notice of that determination to the Borrower and the Administrative Agent,

and the Administrative Agent shall promptly transmit the notice to each other Lender. The Borrower’s right to request, and such Lender’s obligation, if any, to make Eurodollar Rate Loans shall thereupon be restored.

(e) Breakage Costs. In addition to all amounts required to be paid by the Borrower pursuant to Section 2.10 (Interest), the Borrower shall compensate each Lender, upon demand, for all losses, expenses and liabilities (including any loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund or maintain such Lender’s Eurodollar Rate Loan to the Borrower, but excluding any loss of the Applicable Margin or other profit on the relevant Loans) that such Lender may sustain (i) if for any reason a proposed Borrowing or continuation of, or conversion into, Eurodollar Rate Loans does not occur on a date specified therefor in a Notice of Borrowing or a Notice of Conversion or Continuation given by the Borrower or in a telephonic request by it for borrowing or conversion or continuation or a successive Interest Period does not commence after notice therefor is given pursuant to Section 2.11 (Conversion/Continuation Option), (ii) if for any reason any Eurodollar Rate Loan is prepaid by reason of an increase or reduction in Revolving Commitments on a date that is not the last day of the applicable Interest Period, (iii) as a consequence of a required conversion of a Eurodollar Rate Loan to a Base Rate Loan as a result of any of the events indicated in clause (d) above, (iv) as a consequence of any failure by the Borrower to repay Eurodollar Rate Loans when required by the terms hereof, or (v) as a consequence of the assignment of any Eurodollar Rate Loan other than on the last day of an Interest Period therefor as a result of a request by the Borrower pursuant to Section 2.17 (Substitution of Lenders) or Section 11.1(c) (Amendments, Waivers, Etc.). The Lender making demand for such compensation shall deliver to the Borrower concurrently with such demand a written statement as to such losses, expenses and liabilities, and this statement shall be conclusive as to the amount of compensation due to such Lender, absent manifest error.

(f) Without prejudice to the survival of any other agreement of the Borrower hereunder, the agreements and obligations of the Borrower under this Section 2.14 shall survive the termination of the Revolving Commitments and the repayment, and the satisfaction or discharge of the Obligations.

Section 2.15 Capital Adequacy

If at any time any Lender or any Issuer determines that (a) the introduction of, or any change in or in the interpretation of, any law, treaty or governmental rule, regulation or order after the date of this Agreement regarding capital adequacy, (b) compliance with any such law, treaty, rule, regulation or order or (c) compliance with any guideline or request or directive from any central bank or other Governmental Authority (whether or not having the force of law) shall have the effect of reducing the rate of return on such Lender’s or such Issuer’s (or any Person controlling such Lender’s or such Issuer’s) capital as a consequence of its obligations hereunder, under or in respect of any Letter of Credit to a level below that which such Lender or such Issuer or Person could have achieved but for such adoption, change, compliance or interpretation, then, upon demand from time to time by such Lender or such Issuer, the Borrower shall pay to the

Administrative Agent for the account of such Lender or such Issuer, from time to time as specified by such Lender or such Issuer, additional amounts sufficient to compensate such Lender or such Issuer for such reduction. A certificate as to such amounts setting forth in reasonable detail the basis for such demand and a calculation for such amount shall be submitted to the Borrower and the Administrative Agent by such Lender or such Issuer and shall be conclusive and binding for all purposes absent manifest error. Notwithstanding the foregoing, except to the extent, if any, the change (or compliance) referred to in any such certificate shall be retroactive, the Borrower shall not be required to compensate a Lender or such Issuer pursuant to this Section 2.15 for any reduction in rates of return with respect to any period prior to the date that is 180 days prior to the date of each such certificate. Without prejudice to the survival of any other agreement of the Borrower hereunder, the agreements and obligations of the Borrower under this Section 2.15 shall survive the termination of the Revolving Commitments and the repayment, and the satisfaction or discharge of the Obligations.

Section 2.16 Taxes

(a) All payments by the Borrower to or for the account of any Lender or the Administrative Agent, hereunder or under each Loan Document shall be made free and clear of and without deduction for any and all taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto but excluding in the case of each Lender and the Administrative Agent (i) taxes measured by its net income, and franchise taxes imposed on it, by the jurisdiction (or any political subdivision thereof) under the laws of which such Lender or the Administrative Agent (as the case may be) is organized, (ii) any withholding taxes payable with respect to payments under the Loan Documents under laws (including any statute, treaty or regulation) in effect on the Effective Date (or, in the case of any Lender that became a Lender by assignment or transfer after the Effective Date, the effective date of such assignment or transfer, except to the extent that such Lender’s assignor (if any) was entitled, at the time of assignment, to receive additional amounts from the Borrower pursuant to this Section 2.16) applicable to such Lender or the Administrative Agent (as the case may be), and (iii) taxes measured by its net income, and franchise taxes imposed on it as a result of a present or former connection between such Lender and the jurisdiction of the Governmental Authority imposing such tax or any taxing authority thereof or therein (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as “Taxes”). If the Borrower shall be required by law to deduct any Taxes and Other Taxes from or in respect of any sum payable hereunder to any Lender or the Administrative Agent then, (i) the sum payable by the Borrower shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.16) such Lender or the Administrative Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law, and (iv) the Borrower shall furnish to the Administrative Agent the original copy of a receipt evidencing payment thereof within 30 days after such payment is made.

(b) In addition, the Borrower shall pay any stamp or documentary taxes or any other excise or property taxes, charges or similar levies of the United States or any political subdivision thereof or any applicable foreign jurisdiction, and all liabilities with respect thereto, in each case arising from any payment made under any Loan Document or from the execution, delivery or registration of, or otherwise with respect to, any Loan Document (collectively, “Other Taxes”).

(c) The Borrower hereby agrees to indemnify the Administrative Agent and each Lender, for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed on amounts payable under this Section 2.16) withheld by the Borrower or paid by the Administrative Agent or such Lender and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto whether or not such Taxes or Other Taxes were correctly or legally asserted. Payments due under this indemnification shall be made within 10 days of the date the Administrative Agent or such Lender makes demand therefor. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or the Administrative Agent on its own behalf or on behalf of a Lender or the Administrative Agent, shall be conclusive absent manifest error.

(d) Without prejudice to the survival of any other agreement of the Borrower hereunder, the agreements and obligations of the Borrower contained in this Section 2.16 shall survive the resignation and/or replacement of the Administrative Agent, any assignment of rights by, or the replacement of, a Lender, the termination of the Revolving Commitments and the repayment, and the satisfaction or discharge of the Obligations until 30 days after the expiration of the statute of limitations applicable to the collection from the relevant Lender or the Administrative Agent of the Taxes and Other Taxes to which the obligations under this Section 2.16 relate.

(e) Prior to the Effective Date in the case of each Non-U.S. Financial Institution that is a signatory hereto and from time to time thereafter if requested by the Borrower or the Administrative Agent, each Non-U.S. Financial Institution shall provide the Administrative Agent and the Borrower with duly completed copies of whichever of the following is applicable: (i) Form W-8ECI (claiming exemption from withholding because the income is effectively connected with a U.S. trade or business) (or any successor form), (ii) Form W-8BEN (claiming exemption from withholding tax under an income tax treaty) (or any successor form), (iii) in the case of a Non-U.S. Financial Institution claiming exemption under Sections 871(h) or 881(c) of the Code, a Form W-8BEN (claiming exemption from withholding under the portfolio interest exemption) or any successor form or (iv) any other applicable form, certificate or document prescribed by the IRS or any other applicable Governmental Authority certifying as to such Non-U.S. Financial Institution’s entitlement to such exemption from withholding tax or reduced rate with respect to all payments to be made to such Non-U.S. Financial Institutions under the Loan Documents. Within a reasonable period following written request therefor from the Borrower, each Non-U.S. Financial Institution (but only as long as such Non-U.S. Financial Institution is able to do so pursuant to applicable Requirements of Law) shall provide to each of the Borrower and the Administrative Agent such additional Forms W-8BEN or W-8ECI (or any successor or other applicable

form, certificate or document prescribed by the IRS or any other applicable Governmental Authority) to the extent necessary as a result of any prior form expiring or becoming inaccurate or obsolete.

(f) Each Lender (other than a Non-U.S. Financial Institution) shall, on or prior to the date of its execution and delivery of the Agreement or, as the case may be, the date such Lender becomes a Lender, provide to each of the Borrower and the Administrative Agent two completed copies of Form W-9, unless such Lender notifies the Borrower and the Administrative Agent that it is an “exempt recipient,” as defined in Treasury Regulations Section 1.6049-4(c) with respect to which no withholding is required. Each Lender (from time to time following written request therefor from the Borrower, but only for so long as such Lender is able to do so pursuant to applicable Requirements of Law) will provide to each of the Borrower and the Administrative Agent additional copies of Form W-9 or notification of “exempt recipient” status (or any successor or other applicable form, certificate or document prescribed by the IRS) to the extent necessary as a result of any prior form or notification expiring or becoming inaccurate or obsolete.

(g) For any period with respect to which a Lender has failed to provide the Borrower or the Administrative Agent with the appropriate form or other document described in clause (e) or (f) above, as applicable (other than if such failure is due to a change in any applicable Requirement of Law occurring after the date on which a form originally was required to be provided, or if such form is not required under clause (f) above), such Lender shall not be entitled to indemnification under clause (a) or (c) above with respect to Taxes imposed by reason of such failure.

(h) If any Lender or the Administrative Agent receives a refund in respect of any Taxes or Other Taxes as to which it has received a payment from or has been indemnified by the Borrower pursuant to this Section 2.16, which refund in solely the good faith judgment of such Lender or Administrative Agent, as the case may be, is attributable to such payment made by the Borrower, it shall promptly notify the Borrower of such receipt and shall, within 30 days after the later of the receipt of a written request by the Borrower or the receipt of such refund (unless such Lender reasonably expects that is shall be required to repay such refund to the relevant Governmental Authority), pay the amount of such refund to the Borrower, net of all out-of-pocket expenses of such Lender and taxes imposed on the Lender or Administrative Agent with respect to such amounts, without interest thereon and subject to Section 11.6 (Right of Set-off); provided, however, that the Borrower agrees to return such refund to such Lender or the Administrative Agent within 30 days after receipt of written notice in the event that such Lender or the Administrative Agent is required to repay such refund to the relevant Governmental Authority. Nothing contained in this Section 2.16 shall require any Lender or the Administrative Agent to make available to the Borrower any Tax Return or any other document containing information that it deems to be confidential.

Section 2.17 Substitution of Lenders

If (a)(i) any Lender makes a claim under Section 2.14(c) (Increased Costs) or 2.15 (Capital Adequacy), (ii) it becomes illegal for any Lender to continue to fund or make any Eurodollar Rate Loan and such Lender notifies the Borrower pursuant to Section 2.14(d) (Illegality), (iii) the Borrower is required to make any payment pursuant to Section 2.16 (Taxes) that is attributable to a particular Lender, or (iv) any Lender becomes a Defaulting Lender, (b) in the case of clause (a)(i) above, as a consequence of increased costs in respect of which such claim is made, the effective rate of interest payable to such Lender under this Agreement with respect to its Loans exceeds the effective average rate of interest payable to the Requisite Lenders under this Agreement and (c) in the case of clauses (a)(i) and (ii) above, Lenders holding at least 75% of the Revolving Commitments are not subject to such increased costs or illegality, payment or proceedings (any such Lender, an “Affected Lender”), the Borrower may substitute another financial institution for such Affected Lender hereunder, upon reasonable prior written notice (which written notice must be given within 90 days following the notification to the Borrower of any applicable event described in clauses (a)(i), (ii), (iii) or (iv) above) by the Borrower to the Administrative Agent and the Affected Lender that the Borrower intends to make such substitution, which substitute financial institution (x) must be an Eligible Assignee and (y) if not already a Lender, must be reasonably acceptable to the Administrative Agent and each Issuer; provided, however, that, if more than one Lender claims increased costs, illegality or right to payment arising from the same act or condition and such claims are received by the Borrower within 30 days of each other, then the Borrower may substitute all, but not (except to the extent the Borrower has already substituted one of such Affected Lenders before the Borrower’s receipt of the other Affected Lenders’ claim) less than all, Lenders making such claims. If the proposed substitute financial institution or other entity meets the conditions set forth in clauses (x) and (y) above and the written notice was properly issued under this Section 2.17, the Affected Lender shall sell and the substitute financial institution or other entity shall purchase, at par plus accrued interest, all rights and claims of such Affected Lender under the Loan Documents and such substitute financial institution or other entity shall assume and the Affected Lender shall be relieved of its Revolving Commitments and all other prior unperformed obligations of the Affected Lender under the Loan Documents (other than in respect of any damages (other than exemplary or punitive damages, to the extent permitted by applicable law) in respect of any such unperformed obligations). If such Affected Lender is a Lender hereunder, upon the effectiveness of such sale, purchase and assumption (that, in any event shall be conditioned upon the payment in full by the Borrower in cash of all fees, unreimbursed costs and expenses and indemnities accrued and unpaid through such effective date to such Affected Lender), the substitute financial institution or other entity shall become a “Lender” hereunder for all purposes of this Agreement having a Revolving Commitment, in the amount of such Affected Lender’s Revolving Commitment, assumed by it and such Revolving Commitment of the Affected Lender shall be terminated; provided, however, that all indemnities under the Loan Documents shall continue in favor of such Affected Lender. If such Affected Lender is a Lender hereunder, it shall execute an Assignment and Acceptance to evidence such transfer; provided, however, that the failure of the Affected Lender to execute such Assignment and Acceptance shall not invalidate such assignment,

and such Assignment and Acceptance shall be deemed to be executed upon receipt by such Affected Lender of such payment in full.

Section 2.18 Incremental Revolving Commitments

(a) The Borrower may by written notice to the Administrative Agent elect to request prior to the Revolving Facility Termination Date, one or more increases to the existing Revolving Commitments (any such increase, the “New Revolving Commitments”), by an amount not in excess of $300,000,000.00 in the aggregate and not less than $25,000,000.00 individually (or such lesser amount which shall be approved by Administrative Agent).

(b) Such notice shall specify (i) the date (each, an “Increased Amount Date”) on which the Borrower proposes that the New Revolving Commitments shall be effective, which shall be a date not less than 10 Business Days after the date on which such notice is delivered to the Administrative Agent and (ii) the identity of each Lender or other Person that is an Eligible Assignee (each, a “New Lender”) to whom the Borrower proposes any portion of such New Revolving Commitments be allocated and the amounts of such allocations; provided that the Administrative Agent may elect or decline to arrange such New Revolving Commitments in its sole discretion and any Lender approached to provide all or a portion of the New Revolving Commitments may elect or decline, in its sole discretion, to provide a New Revolving Commitment.

(c) Such New Revolving Commitments shall become effective, as of such Increased Amount Date; provided that (i) no Default or Event of Default shall exist on such Increased Amount Date before or after giving effect to such New Revolving Commitments; (ii) the Borrower shall be in pro forma compliance with each of the covenants set forth in Article V (Financial Covenants) as of the last day of the most recently ended Fiscal Quarter after giving effect to such New Revolving Commitments; (iii) the New Revolving Commitments shall be effected pursuant to a joinder agreement in form and substance acceptable to the Administrative Agent in its reasonable discretion, executed and delivered by the Borrower, the New Lender and the Administrative Agent, and which shall be recorded in the Register and each New Lender shall be subject to the requirements set forth in Section 2.16(e) and (f) (Taxes); (iv) the Borrower shall make any payments required pursuant to Section 2.14(e) (Breakage Costs) in connection with the New Revolving Commitments; and (v) the Borrower shall deliver or cause to be delivered any legal opinions or other documents reasonably requested by Administrative Agent in connection with any such transaction.

(d) On the Increased Amount Date on which New Revolving Commitments are effected, subject to the satisfaction of the foregoing terms and conditions, (a) each of the Lenders shall assign to each of the New Lenders, and each of the New Lenders shall purchase from each of the Lenders, at the principal amount thereof (together with accrued interest), such interests in the Revolving Loans outstanding on such Increased Amount Date as shall be necessary in order that, after giving effect to all such assignments and purchases, such Revolving Loans will be held by existing Lenders and New Lenders ratably in accordance with their Revolving Commitments after giving

effect to the addition of such New Revolving Commitments to the Revolving Commitments, (b) each New Revolving Commitment shall be deemed for all purposes a Revolving Commitment and each Loan made thereunder (a “New Revolving Loan”) shall be deemed, for all purposes, a Revolving Loan and (c) each New Lender shall become a Lender with respect to the New Revolving Commitment and all matters relating thereto and all other matters under this Agreement.

(e) The Administrative Agent shall notify the Lenders promptly upon receipt of Borrower’s notice of the Increased Amount Date and in respect thereof (y) the New Revolving Commitments and the New Lenders, and (z) in the case of each notice to any Lender, the respective interests in such Lender’s Revolving Loans, in each case subject to the assignments contemplated by this Section 2.18.

(f) The terms and provisions of the New Revolving Loans shall be identical to the Revolving Loans. Each joinder agreement may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the opinion of the Administrative Agent to effect the provision of this Section 2.18.

Section 2.19 Cash Collateral

(a) Certain Credit Support Events. At any time that there shall exist a Defaulting Lender, promptly (but in any event within five Business Days) after the request of the Administrative Agent, the Issuer or the Swing Loan Lender, the Borrower shall deliver to the Collateral Agent cash collateral in an amount sufficient to cover all Fronting Exposure (after giving effect to Section 2.20(a)(iv) (Reallocation of Ratable Portions to Reduce Fronting Exposure) and any cash collateral provided by the Defaulting Lender).

(b) Grant of Security Interest. All cash collateral (other than credit support not constituting funds subject to deposit) shall be maintained in blocked deposit accounts at the Collateral Agent (including, in the case of cash collateral provided pursuant to Section 9.3 (Actions in Respect of Letters of Credit), the Cash Collateral Account). To the extent provided by the Borrower, the Borrower, and to the extent provided by any Lender, such Lender, hereby grants to (and subjects to the control of) the Collateral Agent, for the benefit of the Collateral Agent, the Issuers and the Lenders, and agrees to maintain a first priority security interest in all such cash, deposit accounts and all balances therein, and in all proceeds of the foregoing, all as security for the obligations to which such cash collateral may be applied pursuant to clause (c) below. If at any time the Collateral Agent determines that cash collateral is subject to any right or claim of any Person other than the Collateral Agent as herein provided, or that the total amount of such cash collateral is less than the applicable Fronting Exposure and other obligations secured thereby, the Borrower or the relevant Defaulting Lender will, promptly (but in any event within 5 Business Days) after demand by the Collateral Agent, pay or provide to the Collateral Agent additional cash collateral in an amount sufficient to eliminate such deficiency.

(c) Application. Notwithstanding anything to the contrary contained in this Agreement, cash collateral provided under this Section 2.19 or Section 2.4 (Letters of Credit), 2.3 (Swing Loans), Section 2.5 (Reduction and Termination of the Revolving Commitments), Section 2.9 (Mandatory Prepayments), Section 2.13 (Payments and Computations), Section 2.20 (Defaulting Lenders), or Section 9.3 (Actions in Respect of Letters of Credit) in respect of Letters of Credit or Swing Loans shall be held and applied to the satisfaction of the specific Letter of Credit Obligations, Swing Loans, obligations to fund participations therein (including, as to cash collateral provided by a Defaulting Lender, any interest accrued on such obligation) and other obligations for which such cash collateral was so provided, prior to any other application of such property as may be provided for herein.

(d) Release. Cash collateral (or the appropriate portion thereof) provided to reduce Fronting Exposure or other obligations shall be released promptly following (i) the elimination of the applicable Fronting Exposure or other obligations giving rise thereto (including by the termination of Defaulting Lender status of the Lender (or, as appropriate, its assignee following compliance with Section 11.2(b)(iv) (Assignment and Acceptance)) or (ii) the Collateral Agent’s good faith determination that there exists excess cash collateral; provided, however, that (x) cash collateral furnished by or on behalf of a Loan Party shall not be released during the continuance of a Default or Event of Default (and following application as provided in this Section 2.19 may be otherwise applied in accordance with Section 2.13(e) and (f) (Payments and Computations), and (y) the Person providing cash collateral and the Issuer or Swing Loan Lender, as applicable, may agree that cash collateral shall not be released but instead held to support future anticipated Fronting Exposure or other obligations.

Section 2.20 Defaulting Lenders

(a) Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:

(i) Waivers and Amendments. That Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in Section 11.1 (Amendments, Waivers, Etc.).

(ii) Reallocation of Payments. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of that Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Section 2.9 (Mandatory Prepayments) or otherwise, and including any amounts made available to the Administrative Agent by the Defaulting Lender pursuant to Section 11.6 (Right of Set-off), shall be applied at such time or times as may be determined by the Administrative Agent as follows:

first, to the payment of any amounts owing by that Defaulting Lender to the Administrative Agent hereunder;

second, to the payment on a pro rata basis of any amounts owing by that Defaulting Lender to an Issuer or Swing Loan Lender hereunder;

third, if so determined by the Administrative Agent or requested by an Issuer or the Swing Loan Lender, to be held as cash collateral for future funding obligations of that Defaulting Lender of any participation in any Swing Loan or Letter of Credit;

fourth, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which that Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent;

fifth, if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released in order to satisfy obligations of that Defaulting Lender to fund Loans under this Agreement;

sixth, to the payment of any amounts owing to the Lenders, the Issuers or the Swing Loan Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, any Issuer or the Swing Loan Lender against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement;

seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement; and

eighth, to that Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or Reimbursement Obligations in respect of which that Defaulting Lender has not fully funded its appropriate share and (y) such Loans or Reimbursement Obligations were made at a time when the conditions set forth in Section 3.2 (Conditions Precedent to Each Loan and Letter of Credit) were satisfied or waived, such payment shall be applied solely to pay the Loans of, and Reimbursement Obligations owed to, all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or Reimbursement Obligations owed to, that Defaulting Lender.

Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post cash collateral pursuant to this Section 2.20(a)(ii) shall be deemed paid to and redirected by that Defaulting Lender, and each Lender irrevocably consents hereto.

(iii) Certain Fees. That Defaulting Lender (x) shall not be entitled to receive any Revolving Commitment Fee for any period during which

that Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender) and (y) shall be limited in its right to receive Letter of Credit Participation Fees as provided in Section 2.12(b)(ii) (Letter of Credit Fees).

(iv) Reallocation of Ratable Portions to Reduce Fronting Exposure. During any period in which there is a Defaulting Lender, for purposes of computing the amount of the obligation of each non-Defaulting Lender to acquire, refinance or fund participations in Letters of Credit or Swing Line Loans pursuant to Sections 2.3 (Swing Loans) and 2.4 (Letters of Credit), the “Ratable Portion” of each non-Defaulting Lender shall be computed without giving effect to the Revolving Commitments of that Defaulting Lender; provided, that, (i) each such reallocation shall be given effect only if, at the date the Lender becomes a Defaulting Lender, no Default or Event of Default exists; and (ii) the aggregate obligation of each non-Defaulting Lender to acquire, refinance or fund participations in Letters of Credit and Swing Loans shall not exceed the positive difference, if any, of (1) the Revolving Commitments of that non-Defaulting Lender minus (2) the aggregate Outstandings of that Lender.

(b) Defaulting Lender Cure. If the Borrower, the Administrative Agent, the Swing Loan Lender and each Issuer agree in writing in their sole discretion that a Defaulting Lender should no longer be deemed to be a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any cash collateral), that Lender will, to the extent applicable, purchase that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and participations in Letters of Credit and Swing Loans to be held on a pro rata basis by the Lenders in accordance with their Ratable Portions (without giving effect to clause (a)(iv) above), whereupon that Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

(c) Replacement of Defaulting Lenders. If any Lender is a Defaulting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to be replaced in accordance with Section 2.17 (Substitution of Lenders).

ARTICLE III

CONDITIONS TO LOANS AND LETTERS OF CREDIT

Section 3.1 Conditions Precedent to Effectiveness

This Agreement, including the covenants and obligations of the Borrower hereunder, the obligation of each Lender to make the Loans and the obligation of each Issuer to Issue Letters of Credit shall not become effective until the date (the “Effective Date”) on which all of the following conditions precedent are satisfied or duly waived in accordance with Section 11.1 (Amendments, Waivers, Etc.):

(a) Deliveries at Closing. The Administrative Agent shall have received (i) this Agreement, executed and delivered by a Responsible Officer of the Borrower, (ii) if requested by any Lender, Promissory Notes substantially in the form of Exhibit B (Form of Promissory Note), each executed and delivered by a Responsible Officer of the Borrower, (iii) each Collateral Document, executed and delivered by a Responsible Officer of the Borrower and each Guarantor, as applicable, and (iv) any intercompany notes evidencing Indebtedness permitted to be incurred pursuant to Section 8.1(f) (Indebtedness) with respect to any outstanding intercompany obligations and advances owed to a Loan Party (other than the New Borrower), executed and delivered by the obligor thereof.

(b) Financial Statements. The Administrative Agent shall have received (i) the Projections, (ii) GAAP audited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of the Borrower for the 2007, 2008 and 2009 Fiscal Years and (iii) GAAP unaudited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of the Borrower for each subsequent fiscal quarter ended at least 45 days before the Effective Date, which financial statements shall not be materially inconsistent in an adverse manner with the financial statements or forecasts previously provided to the Administrative Agent.

(c) 2006 Credit Agreement. Concurrently with the initial funding of Loans hereunder on the Effective Date, the Borrower shall have repaid all amounts owed under the 2006 Credit Agreement (other than Existing Letters of Credit) and delivered to the Administrative Agent an executed payoff letter evidencing the termination and payoff on the Effective Date of the 2006 Credit Agreement and all documents or instruments necessary to release all Liens securing the 2006 Credit Agreement, each in form and substance reasonably satisfactory to the Administrative Agent.

(d) Collateral Documents. The Administrative Agent shall have received the results of a recent Lien search in each relevant jurisdiction in the United States with respect to the Borrower and those of the Subsidiaries that shall be Guarantors as of the Effective Date, and such search shall reveal no Liens on any of the assets of the Borrower or any of such Subsidiaries except, in the case of Collateral other than Pledged Stock, for Liens expressly permitted by Section 8.2 (Liens, Etc.) and except for Liens to be discharged on or prior to the Effective Date pursuant to documentation reasonably

satisfactory to the Administrative Agent. The Collateral Documents shall be in full force and effect on the Effective Date, and each document (including each Uniform Commercial Code financing statement and documentation relating to the Mortgaged Vessels) required by law or reasonably requested by the Administrative Agent to be filed, registered or recorded in order to create in favor of the Administrative Agent for the ratable benefit of the Secured Parties a valid, legal and perfected first-priority Lien on, and security interest in, the Collateral (subject to any Liens expressly permitted by Section 8.2 (Liens, Etc.)) shall have been delivered to the Collateral Agent. The Pledged Stock and the Pledged Notes shall be duly and validly pledged under the Pledge and Security Agreement to the Administrative Agent for the ratable benefit of the Secured Parties, and certificates representing such pledged Collateral, accompanied by instruments of transfer and stock powers endorsed in blank, shall have been delivered to the Administrative Agent.

(e) Legal Opinions. The Administrative Agent shall have received, on behalf of itself, the Collateral Agent, the Syndication Agent, the Co-Documentation Agents, the Lenders and the Issuers, favorable written opinions of (a) Baker Botts L.L.P., counsel to the Loan Parties, (b) Liane K. Hinrichs, General Counsel of the Borrower, (c) Durling & Durling, special Panamanian counsel to certain of the Loan Parties, (d) Borrower’s special Cayman Islands counsel, (e) Borrower’s special Canada counsel, (f) Borrower’s special Barbados counsel and (g) each other special and local counsel to the Loan Parties as the Administrative Agent may reasonably request, in each case dated as of the Effective Date and addressed to the Administrative Agent, the Collateral Agent, the Syndication Agent, the Co-Documentation Agents, the Lenders and the Issuers and addressing such other matters as any Lender through the Administrative Agent may reasonably request.

(f) Certificates. The Administrative Agent shall have received (i) a copy of the certificate or articles of incorporation or other formation documents, including all amendments thereto, of each Loan Party, certified, in the case of Loan Parties incorporated in Panama and the United States, as of a recent date by the appropriate governmental authority of the jurisdiction of its organization, and a certificate as to the good standing (if applicable in such jurisdiction) of each Loan Party (other than those Loan Parties organized in Mexico, Nigeria, Indonesia or Kazakhstan) as of a recent date, from such governmental authority; (ii) a certificate of an Authorized Officer, the Secretary or the Assistant Secretary of each Loan Party dated the Effective Date and certifying (A) that attached thereto is a true and complete copy of the by-laws or similar document of such Loan Party as in effect on the Effective Date and at all times since a date prior to the date of the resolutions described in clause (B) below, (B) that attached thereto is a true and complete copy of resolutions duly adopted by the board of directors (or similar governing body) of such Loan Party authorizing the execution, delivery and performance of the Loan Documents to which such Person is a party and that such resolutions have not been modified, rescinded or amended and are in full force and effect, (C) that the certificate or articles of incorporation or other formation documents of such Loan Party have not been amended since the date of the last amendment thereto furnished pursuant to clause (i) above and (D) as to the incumbency and specimen signature of each officer executing any Loan Document or any other document delivered in connection

herewith on behalf of such Loan Party; (iii) a certificate of another officer as to the incumbency and specimen signature of the Authorized Officer executing the certificate pursuant to clause (ii) above; and (iv) such other documents as the Administrative Agent may reasonably request.

(g) Solvency; Representations and Warranties; No Defaults; Litigation. The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower in the form of Exhibit J hereto (i) stating that the Borrower and the Guarantors, taken as a whole, are Solvent as of the Effective Date and after giving effect to the initial Loans and Letters of Credit, with respect to the initial Loans, the application of the proceeds thereof in accordance with Section 7.9 (Application of Proceeds) and the payment of all estimated legal, accounting and other fees related hereto and thereto and (ii) to the effect that (A) the conditions set forth in Section 3.2(b) (Conditions Precedent to Each Loan and Letter of Credit) have been satisfied and (B) as of the Effective Date, no litigation not listed on Schedule 4.7 (Litigation) shall have been commenced against the Borrower or any of its Restricted Subsidiaries that could reasonably be expected to have a Material Adverse Effect.

(h) USA Patriot Act. To the extent requested, the Agents and the Lenders shall have received all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the USA Patriot Act.

(i) Fees and Expenses. There shall have been paid to the Administrative Agent, for the account of the Administrative Agent and the Lenders, as applicable, and to each Joint Lead Arranger, for its own account, all fees and expenses (including reasonable fees and expenses of counsel to the Administrative Agent to the extent the Borrower receives invoices therefor at least one Business Day prior to the Effective Date) due and payable on or before the Effective Date.

(j) Consents, Etc. Each of the Borrower and its Restricted Subsidiaries shall have received all consents and authorizations required pursuant to any enforceable and material Contractual Obligation with any other Person and shall have obtained all consents and authorizations of, and effected all notices to and filings with, any Governmental Authority, in each case, as may be necessary to allow each of the Borrower and its Restricted Subsidiaries lawfully to execute, deliver and perform, in all material respects, their respective obligations hereunder and under and the Loan Documents to which each of them, respectively, is, or shall be, a party and each other agreement or instrument to be executed and delivered by each of them, respectively, pursuant thereto or in connection therewith.

(k) Title Insurance. The Administrative Agent shall have received in respect of each Mortgaged Property a mortgagee’s title insurance policy (or policies) or marked up unconditional binder for such insurance. Each such policy shall (i) be in an amount reasonably satisfactory to the Administrative Agent; (ii) insure that the Mortgage insured thereby creates a valid first Lien on, and security interest in, such Mortgaged Property free and clear of all defects and encumbrances, except as disclosed therein; (iii)

name the Collateral Agent, for the benefit of the Secured Parties, as the insured thereunder; (iv) contain such endorsements and affirmative coverage as the Administrative Agent may reasonably request in form and substance acceptable to the Administrative Agent; and (v) be issued by title companies satisfactory to the Administrative Agent (including any such title companies acting as co-insurers or reinsurers, at the option of the Administrative Agent) (in each such case, a “Title Insurance Company”). The Administrative Agent shall have received evidence satisfactory to it that all premiums in respect of each such policy, all charges for mortgage recording tax, and all related expenses, if any, have been paid or will be paid on the Effective Date. The Administrative Agent shall have received a copy of all recorded documents referred to, or listed as exceptions to title in, the title policy or policies referred to above and a copy of all other material documents affecting the Mortgaged Property.

(l) Flood Insurance. If requested by the Administrative Agent, the Administrative Agent shall have received (i) a policy of flood insurance that (A) covers any parcel of improved Mortgaged Property that is located in a flood zone and (B) is written in an amount not less than the outstanding principal amount of the indebtedness secured by such Mortgage that is reasonably allocable to such Mortgaged Property or the maximum limit of coverage made available with respect to the particular type of property under the National Flood Insurance Act of 1968, whichever is less and (ii) confirmation that the Borrower has received the notice required pursuant to Section 208.25(i) of Regulation H of the Board of Governors of the Federal Reserve System of the United States.

(m) Conditions with respect to the Mortgaged Vessels. The Administrative Agent shall have received (i) abstracts of title or, at its discretion, a certificate of ownership or other similar document with respect to the Mortgaged Vessels and such abstracts of title, certificate of ownership or other similar document shall reveal no Liens on such Mortgaged Vessels (subject to any Liens expressly permitted by Section 8.2 (Liens, Etc.) and except for Liens to be discharged on or prior to the Effective Date), (ii) with respect to each Mortgaged Vessel other than McDermott LB 32, a copy of a confirmation of class certificate issued by the American Bureau of Shipping or another classification society acceptable to the Administrative Agent showing no recommendations affecting class and, to the extent applicable to such Mortgaged Vessel, corresponding certificates of financial responsibility, (iii) with respect to McDermott LB 32, a copy of an interim confirmation of class certificate issued by the American Bureau of Shipping, (iv) with respect to each Mortgaged Vessel, copies of certificates of registries documentation, and (v) appraisals of each of the Mortgaged Vessels in form and substance acceptable to the Administrative Agent.

(n) Updated Ratings. The Administrative Agent shall have received updated ratings issued by S&P and Moody’s.

Section 3.2 Conditions Precedent to Each Loan and Letter of Credit

The obligation of each Lender on any date (including the Effective Date) to make any Loan and of each Issuer on any date (including the Effective Date) to Issue any Letter of Credit is subject to the satisfaction of each of the following conditions precedent:

(a) Request for Borrowing or Issuance of Letter of Credit. With respect to any Loan, the Administrative Agent shall have received a duly executed Notice of Borrowing (or, in the case of Swing Loans, a duly executed Swing Loan Request), and, with respect to any Letter of Credit, the Issuer shall have received a duly executed Letter of Credit Request.

(b) Representations and Warranties; No Defaults. The following statements shall be true on the date of such Loan or Issuance, both before and after giving effect thereto and, in the case of any Loan, to the application of the proceeds therefrom:

(i) the representations and warranties set forth in Article IV (Representations and Warranties) and in the other Loan Documents that have no materiality or Material Adverse Effect qualification shall be true and correct in all material respects and the representations and warranties set forth in Article IV (Representations and Warranties) and in the other Loan Documents that have a materiality or Material Adverse Effect qualification shall be true and correct in all respects, in each case with the same effect as though made on and as of such date or, to the extent such representations and warranties expressly relate to an earlier date, as of such earlier date; and

(ii) no Default or Event of Default shall have occurred and be continuing.

(c) No Legal Impediments. The making of the Loans or the Issuance of such Letter of Credit on such date does not violate any applicable Requirement of Law on the date of or immediately following such Loan or Issuance of such Letter of Credit and is not enjoined, temporarily, preliminarily or permanently.

(d) Alternative Currencies. After giving effect to any proposed Issuance of a Letter of Credit denominated in an Alternative Currency, the sum of the Dollar Equivalent of the Letter of Credit Obligations at such time in respect of each Letter of Credit denominated in an Alternative Currency would not exceed $150,000,000.00 as a result of such proposed Issuance.

Section 3.3 Determinations of Initial Borrowing Conditions

For purposes of determining compliance with the conditions specified in Section 3.1 (Conditions Precedent to Effectiveness), each Lender shall be deemed to have consented to, approved, accepted or be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to the Lenders unless an officer of the Administrative Agent responsible for the transactions contemplated by the Loan Documents shall have received notice from such Lender prior

to the Effective Date specifying its objection thereto and such Lender shall not have made available to the Administrative Agent such Lender’s Ratable Portion of any Borrowing (if any is to be made on such date).

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

To induce the Lenders, the Issuers and the Administrative Agent to enter into this Agreement, the Initial Borrower and the New Borrower (as applicable) each represents and warrants each of the following to the Lenders, the Issuers and the Administrative Agent, on and as of the Effective Date and the making of the Loans and the other financial accommodations on the Effective Date and on and as of each date as required by Section 3.2(b)(i) (Representations and Warranties; No Defaults).

Section 4.1 Corporate Existence; Compliance with Law

Each of the Borrower and its Restricted Subsidiaries and the New Borrower (a) is duly organized, validly existing and, except where the failure to be in good standing could not reasonably be expected to have a Material Adverse Effect, in good standing under the laws of the jurisdiction of its organization, (b) is duly qualified to do business as a foreign corporation and in good standing under the laws of each jurisdiction where such qualification is necessary, except where the failure to be so qualified or in good standing could not reasonably be expected to have a Material Adverse Effect, (c) has all requisite corporate or other organizational power and authority and the legal right to own, pledge, mortgage and operate its properties, to lease the property it operates under lease and to conduct its business as now or currently proposed to be conducted, (d) is in compliance with its Constituent Documents, (e) is in compliance with all applicable Requirements of Law except where the failure to be in compliance could not, in the aggregate, be reasonably expected to have a Material Adverse Effect and (f) has all necessary licenses, permits, consents or approvals from or by, has made all necessary filings with, and has given all necessary notices to, each Governmental Authority having jurisdiction, to the extent required for such ownership, operation and conduct, except for licenses, permits, consents, approvals or filings that can be obtained or made by the taking of ministerial action to secure the grant or transfer thereof or the failure of which to obtain or make could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 4.2 Corporate Power; Authorization; Enforceable Obligations

(a) The execution, delivery and performance by each Loan Party of the Loan Documents to which it is a party and the consummation of the transactions contemplated thereby:

(i) are within such Loan Party’s corporate, limited liability company, partnership or other organizational powers;

(ii) have been or, at the time of delivery thereof pursuant to this Agreement will have been duly authorized by all necessary corporate, limited liability company or partnership action, including the consent of shareholders, partners and members where required;

(iii) do not and will not (A) contravene such Loan Party’s respective Constituent Documents, (B) violate any other Requirement of Law applicable to such Loan Party (including Regulations T, U and X of the Federal Reserve Board), or any order or decree of any Governmental Authority or arbitrator applicable to such Loan Party, (C) conflict with or result in the breach of, or constitute a default under, or result in or permit the termination or acceleration of, any lawful Contractual Obligation of such Loan Party or any of its Restricted Subsidiaries, other than in the case of this clause (C) any such conflict, breach, default, termination or acceleration that could not reasonably be expected to have a Material Adverse Effect, or (D) result in the creation or imposition of any Lien upon any property of such Loan Party, other than those in favor of the Secured Parties pursuant to the Collateral Documents; and

(iv) do not require the consent of, authorization by, approval of, notice to, or filing or registration with, any Governmental Authority or any other Person, other than those listed on Schedule 4.2 (Consents) and that have been or will be, prior to the Effective Date, obtained or made, copies of which have been or will be delivered to the Administrative Agent pursuant to Section 3.1 (Conditions Precedent to Effectiveness), and each of which on the Effective Date will be in full force and effect and, with respect to the Collateral, filings required to perfect the Liens created by the Collateral Documents.

(b) This Agreement has been, and each of the other Loan Documents will have been upon delivery thereof pursuant to the terms of this Agreement, duly executed and delivered by each Loan Party who is a party thereto. This Agreement is, and the other Loan Documents will be, when delivered, the legal, valid and binding obligation of each Loan Party who is a party thereto, enforceable against such Loan Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

Section 4.3 Ownership of Borrowers; Subsidiaries

(a) All of the outstanding capital stock of the Initial Borrower is validly issued, fully paid and non-assessable.

(b) Set forth on Schedule 4.3(a) (Effective Date Ownership of Subsidiaries) is a complete and accurate list showing, as of the Effective Date, all Subsidiaries of the Borrower and, as to each such Subsidiary, the jurisdiction of its organization, the number of shares of each class of Stock authorized (if applicable), the number outstanding on the Effective Date and the percentage of the outstanding shares of

each such class owned (directly or indirectly) by the Borrower. Except as set forth on Schedule 4.3(a) (Effective Date Ownership of Subsidiaries), no Stock of any Restricted Subsidiary of the Borrower is subject to any outstanding option, warrant, right of conversion or purchase of any similar right. Except as set forth on Schedule 4.3(a) (Effective Date Ownership of Subsidiaries), all of the outstanding Stock of each Subsidiary of the Borrower owned (directly or indirectly) by the Borrower has been validly issued, is fully paid and non-assessable (to the extent applicable) and is owned by the Borrower or a Subsidiary of the Borrower, free and clear of all Liens (other than the Lien in favor of the Secured Parties created pursuant to the Pledge and Security Agreement), options, warrants, rights of conversion or purchase or any similar rights. Except as set forth on Schedule 4.3(a) (Effective Date Ownership of Subsidiaries), neither the Borrower nor any such Subsidiary is a party to, or has knowledge of, any agreement restricting the transfer or hypothecation of any Stock of any such Subsidiary, other than the Loan Documents and, with respect to any Subsidiary that is not a Wholly-Owned Subsidiary, the governing documents of such Subsidiary. The Borrower does not own or hold, directly or indirectly, any Stock of any Person other than such Subsidiaries and Investments permitted by Sections 8.3 (Acquisitions) or 8.5 (Restricted Payments).

(c) Set forth on Schedule 4.3(b) (Post-Spin Ownership of Subsidiaries) is a complete and accurate list showing all Subsidiaries of the New Borrower that, as of the Effective Date, the New Borrower expects to be a Subsidiary of the New Borrower immediately after the effective time of the Spin and, as to each such Subsidiary, the jurisdiction of its organization, the number of shares of each class of Stock authorized (if applicable), the number outstanding immediately after the effective time of the Spin and the percentage of the outstanding shares of each such class owned (directly or indirectly) by the New Borrower. Except as set forth on Schedule 4.3(b) (Post-Spin Ownership of Subsidiaries), no Stock of any Restricted Subsidiary of the New Borrower will be subject to any outstanding option, warrant, right of conversion or purchase of any similar right immediately after the effective time of the Spin. Except as set forth on Schedule 4.3(b) (Post-Spin Ownership of Subsidiaries), all of the outstanding Stock of each Subsidiary of the New Borrower owned (directly or indirectly) by the New Borrower will have been validly issued, be fully paid and non-assessable (to the extent applicable) and be owned by the New Borrower or a Subsidiary of the New Borrower, free and clear of all Liens (other than the Lien in favor of the Secured Parties created pursuant to the Pledge and Security Agreement), options, warrants, rights of conversion or purchase or any similar rights, in each case immediately after the effective time of the Spin. Except as set forth on Schedule 4.3(b) (Post-Spin Ownership of Subsidiaries), neither the New Borrower nor any such Subsidiary is a party to, or has knowledge of, any agreement that will restrict the transfer or hypothecation of any Stock of any such Subsidiary, other than the Loan Documents and, with respect to any Subsidiary that is not a Wholly-Owned Subsidiary, the governing documents of such Subsidiary, in each case immediately after the effective time of the Spin. Immediately after the effective time of the Spin, the New Borrower will not own or hold, directly or indirectly, any Stock of any Person other than such Subsidiaries and Investments permitted by Sections 8.3 (Acquisitions) or 8.5 (Restricted Payments).

Section 4.4 Financial Statements

(a) The audited financial statements comprising the Financial Statements for the Borrower for the fiscal year ended December 31, 2009, copies of which have been furnished to each Lender, fairly present in all material respects the consolidated financial condition of the Borrower and its Subsidiaries as at such dates and the consolidated results of the operations of the Borrower and its Subsidiaries for the period ended on such dates, all in conformity with GAAP.

(b) The Projections have been prepared by the Borrower taking into consideration past operations of its business, and reflect, as of the Effective Date, projections for the period beginning approximately January 1, 2010 and ending approximately December 31, 2014 on a Fiscal Year by Fiscal Year basis. The Projections are based upon estimates and assumptions stated therein, all of which the Borrower believes, as of the Effective Date, to be reasonable in light of current conditions and current facts known to the Borrower (other than any necessary adjustments due to fees payable in accordance herewith) and, as of the Effective Date, reflect the Borrower’s good faith estimates of the future financial performance of the Borrower and its Subsidiaries and of the other information projected therein for the periods set forth therein.

(c) Neither the Initial Borrower nor any of its Subsidiaries has, as of the Effective Date, any material obligation, contingent liability or liability for taxes, long-term leases (other than operating leases) or unusual forward or long-term commitment that is not reflected in the financial statements referred to in clause (a) above and not otherwise permitted by this Agreement.

Section 4.5 Material Adverse Effect

Since December 31, 2009, there has been no event or development that could reasonably be expected to have Material Adverse Effect.

Section 4.6 Solvency

Both before and after giving effect to (a) the Loans and Letter of Credit Obligations to be made or extended on the Effective Date or such other date as Loans and Letter of Credit Obligations requested hereunder are made or extended, (b) the disbursement of the proceeds of such Loans pursuant to the instructions of the Borrower, (c) the consummation of the transactions contemplated hereby, (d) the Spin and (e) the payment and accrual of all transaction costs in connection with the foregoing, the Borrower and the Guarantors, taken as a whole, are Solvent.

Section 4.7 Litigation

Except as set forth on Schedule 4.7 (Litigation), there are no pending or, to the knowledge of the Borrower, threatened actions, investigations or proceedings against the Borrower or any of its Subsidiaries before any court, Governmental Authority or arbitrator other than those that, in the aggregate, could not reasonably be expected to have

a Material Adverse Effect. Schedule 4.7 (Litigation) lists all litigation pending against any Loan Party as of the Effective Date that, if adversely determined, could be reasonably expected to have a Material Adverse Effect.

Section 4.8 Taxes

All federal income and other material tax returns, reports and statements (collectively, the “Tax Returns”) required to be filed by the Borrower or any of its Tax Affiliates have been filed with the appropriate Governmental Authorities in all jurisdictions in which such Tax Returns are required to be filed, all such Tax Returns are true and correct in all material respects, and all material taxes, charges and other impositions reflected therein or otherwise due and payable have been paid prior to the date on which any fine, penalty, interest, late charge or loss may be added thereto for non-payment thereof (whether or not shown on any Tax Return) except where contested in good faith and by appropriate proceedings if adequate reserves therefor have been established on the books of the Borrower or such Tax Affiliate in conformity with GAAP. The Borrower and each of its Tax Affiliates have withheld and timely paid to the respective Governmental Authorities all material amounts required to be withheld.

Section 4.9 Full Disclosure

The Information Memorandum and any other information prepared or furnished by or on behalf of any Loan Party and delivered to the Lenders in writing in connection with this Agreement or the consummation of the transactions contemplated hereunder or thereunder (in each case, taken as a whole) does not, as of the time of delivery of such information (with respect to the Information Memorandum, as of the Effective Date only), contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein or herein not misleading; provided, however, that, to the extent any such information was based upon, or constituted, a forecast or projection, such Loan Party represents only, in respect of such projection or forecast, that it acted in good faith and utilized reasonable assumptions and due care in the preparation of such information.

Section 4.10 Margin Regulations

No Loan Party is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U of the Federal Reserve Board), and no proceeds of any Borrowing will be used to purchase or carry any such margin stock or to extend credit to others for the purpose of purchasing or carrying any such margin stock in contravention of Regulation T, U or X of the Federal Reserve Board.

Section 4.11 No Burdensome Restrictions; No Defaults

(a) None of the Borrower nor any of its Restricted Subsidiaries nor the New Borrower (i) is a party to any Contractual Obligation (x) the compliance with which could reasonably be expected to have a Material Adverse Effect or (y) the performance of which by any thereof would result in the creation of a Lien (other than a Lien permitted

under Section 8.2 (Liens, Etc.)) on the property or assets of any thereof or (ii) is subject to any charter restriction that could reasonably be expected to have a Material Adverse Effect.

(b) Neither the Borrower nor any of its Restricted Subsidiaries nor the New Borrower is in default under or with respect to any Contractual Obligation owed by it, other than, in either case, those defaults that could not reasonably be expected to have a Material Adverse Effect.

Section 4.12 Investment Company Act

Neither the Borrower nor any of its Subsidiaries nor the New Borrower is an “investment company” or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended.

Section 4.13 Use of Proceeds

The (a) proceeds of the Revolving Loans are being used solely by the Borrower for working capital needs and for general corporate purposes of the Borrower and its Subsidiaries and (b) Letters of Credit are being used solely by the Borrower to support warranties, bid bonds, payment or performance obligations and for other general corporate purposes by the Borrower, its Subsidiaries, Joint Ventures and Affiliates (other than any Person that is anticipated to be an Affiliate of Babcock after the Spin).

Section 4.14 Insurance

All policies of insurance of any kind or nature currently maintained by the Borrower or any of its Restricted Subsidiaries or the New Borrower, including policies of fire, theft, property damage, other commercial general liability, employee fidelity and workers’ compensation, are in full force and effect and are of a nature and provide such coverage as is sufficient and as is customarily carried by businesses of the size and character of such Person.

Section 4.15 Labor Matters

(a) There are no strikes, work stoppages, slowdowns or lockouts pending or, to the knowledge of the Initial Borrower or the New Borrower, threatened against or involving the Borrower or any of its Subsidiaries or the New Borrower, other than those that, in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

(b) There are no unfair labor practices, grievances or complaints pending, or, to the knowledge of the Initial Borrower or the New Borrower, threatened, against or involving the Borrower or any of its Subsidiaries or the New Borrower, nor, to the knowledge of the Initial Borrower or the New Borrower, are there any unfair labor

practices, arbitrations or grievances threatened involving the Borrower or any of its Subsidiaries or the New Borrower, other than those that if resolved adversely to the Borrower or any of its Subsidiaries or the New Borrower, as applicable, could not reasonably be expected to have a Material Adverse Effect.

(c) Except as set forth on Schedule 4.15 (Labor Matters), as of the Effective Date, there is no collective bargaining agreement covering any employee of the Borrower or any of its Restricted Subsidiaries or the New Borrower. Except as set forth on Schedule 4.15 (Labor Matters), with respect to employees of the Borrower or any of its Restricted Subsidiaries or the New Borrower not already covered by a collective bargaining agreement set forth on Schedule 4.15 (Labor Matters), as of the Effective Date no union representation question exists with respect to such employees and, to the knowledge of the Initial Borrower or the New Borrower, no union organization activity is taking place as of the Effective Date.

Section 4.16 ERISA

(a) Except as set forth on Schedule 4.16 (ERISA), each Employee Benefit Plan that is intended to qualify under Section 401 of the Code has received a favorable determination letter from the IRS indicating that such Employee Benefit Plan is so qualified and nothing has occurred subsequent to the issuance of such determination letter which could cause such Employee Benefit Plan to lose its qualified status. Any trust created under any Employee Benefit Plan is exempt from tax under the provisions of Section 501 of the Code, except where such failures could not reasonably be expected to have a Material Adverse Effect.

(b) The Borrower and its Restricted Subsidiaries and the New Borrower, each Guarantor and each of their respective ERISA Affiliates is in material compliance with all applicable provisions and requirements of ERISA, the Code and applicable Employee Benefit Plan provisions with respect to each Employee Benefit Plan except for non-compliances that could not reasonably be expected to have a Material Adverse Effect.

(c) With respect to each Title IV Plan and each Multiemployer Plan, the Borrower and each of its Restricted Subsidiaries and the New Borrower, and each of their respective ERISA Affiliates has made all contributions required under ERISA and the Code and are in material compliance with the minimum funding standard of Section 412 of the Code (in each case, whether or not waived in accordance with Section 412(c) of the Code).

(d) There has not been, nor is there reasonably expected to occur, any ERISA Event other than those that could not reasonably be expected to have a Material Adverse Effect.

(e) Except (i) to the extent required under Section 4980B of the Code or similar state laws, and (ii) with respect to which the aggregate liability, calculated on a FAS 106 basis as of December 31, 2009, does not exceed $150,000,000.00, no Employee

Benefit Plan provides health or welfare benefits (through the purchase of insurance or otherwise) to any retired or former employees, consultants or directors (or their dependents) of the Borrower, any of its Restricted Subsidiaries, the New Borrower or any of their respective ERISA Affiliates. None of the Borrower or any of its Restricted Subsidiaries, the New Borrower or any of their respective ERISA Affiliates has incurred or reasonably expects to incur any withdrawal liability with respect to any Multiemployer Plan. The Borrower and each of its Restricted Subsidiaries, the New Borrower and each of their ERISA Affiliates has complied with the requirements of Section 515 of ERISA with respect to each Multiemployer Plan and are not in material “default” (as defined in Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan.

Section 4.17 Environmental Matters

(a) Except as disclosed on Schedule 4.17 (Environmental Matters), the operations of the Borrower and each of its Restricted Subsidiaries and the New Borrower have been and are in compliance with all Environmental Laws, including obtaining and complying with all required environmental, health and safety Permits, other than non-compliances that, in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(b) None of the Borrower or any of its Restricted Subsidiaries or the New Borrower or any Real Property currently or, to the knowledge of the Initial Borrower or the New Borrower, previously owned, operated or leased by or for the Borrower or any of its Restricted Subsidiaries or the New Borrower is subject to any pending or, to the knowledge of the Initial Borrower or the New Borrower, threatened, claim, order, agreement, notice of violation, notice of potential liability or is the subject of any pending or threatened proceeding or governmental investigation under or pursuant to Environmental Laws other than those orders, agreements, notices, proceedings or investigations that, in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(c) Except as disclosed on Schedule 4.17 (Environmental Matters), to the knowledge of the Initial Borrower or the New Borrower, there are no facts, circumstances or conditions arising out of or relating to the operations or ownership of the Borrower or any of its Restricted Subsidiaries or the New Borrower or of Real Property owned, operated or leased by the Borrower or any of its Restricted Subsidiaries or the New Borrower that are not specifically included in the financial information furnished to the Lenders other than those that, in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

Section 4.18 Intellectual Property

Except where the failure to do so could not, taken as a whole, reasonably be expected to have a Material Adverse Effect, the Borrower and its Restricted Subsidiaries and the New Borrower own or license or otherwise have the right to use all licenses, permits, patents, patent applications, trademarks, trademark applications, service marks, trade names, copyrights, copyright applications, franchises, authorizations and other

intellectual property rights (including all Intellectual Property as defined in the Pledge and Security Agreement) that are necessary for the operations of their respective businesses, without infringement upon or conflict with the rights of any other Person with respect thereto. Except where the failure to do so could not, taken as a whole, reasonably be expected to have a Material Adverse Effect, no slogan or other advertising device, product, process, method, substance, part or component, or other material now employed, or now contemplated to be employed, by the Borrower or any of its Restricted Subsidiaries or the New Borrower infringes upon or conflicts with any rights owned by any other Person, and no claim or litigation regarding any of the foregoing is pending or threatened.

Section 4.19 Title; Real Property

(a) Each of the Borrower and its Restricted Subsidiaries and the New Borrower has valid and indefeasible title to, or valid leasehold interests in, all of its material properties and assets (including Real Property) and good title to, or valid leasehold interests in, all personal property, in each case that is purported to be owned or leased by it, including those reflected on the most recent Financial Statements delivered by the Borrower, and none of such properties and assets is subject to any Lien, except Liens permitted under Section 8.2 (Liens, Etc.). The Borrower and each of its Restricted Subsidiaries and the New Borrower have received all deeds, assignments, waivers, consents, non-disturbance and recognition or similar agreements, bills of sale and other documents, and have duly effected all recordings, filings and other actions necessary to establish, protect and perfect the Borrower’s and each of its Restricted Subsidiaries’ and the New Borrower’s right, title and interest in and to all such property, other than those that could not reasonably be expected to result in a Material Adverse Effect.

(b) Set forth on Schedule 4.19(a) (Real Property) is a complete and accurate list, as of the Effective Date, of all (a) owned Real Property with a reasonably estimated Fair Market Value in excess of $3,000,000.00 showing, as of the Effective Date, the street address, county (or other relevant jurisdiction or state) and the record owner thereof and (b) leased Real Property with annual lease payments in excess of $1,000,000.00 showing, as of the Effective Date, the street address and county (or other relevant jurisdiction or state) thereof.

(c) No portion of any Real Property has suffered any material damage by fire or other casualty loss that has not heretofore been completely repaired and restored to its original condition other than those that could not reasonably be expected to have a Material Adverse Effect. As of the Effective Date, no portion of any Mortgaged Property is located in a special flood hazard area as designated by any federal Governmental Authority other than those for which flood insurance has been provided in accordance with Section 3.1(l) (Flood Insurance).

(d) Except as could not reasonably be expected to have a Material Adverse Effect, (a) each Loan Party has obtained and holds all Permits required in respect of all Real Property and for any other property otherwise operated by or on behalf of, or for the benefit of, such Person and for the operation of each of its businesses as

presently conducted and as proposed to be conducted, (b) all such Permits are in full force and effect, and each Loan Party has performed and observed all requirements of such Permits, (c) no event has occurred that allows or results in, or after notice or lapse of time would allow or result in, revocation or termination by the issuer thereof or in any other impairment of the rights of the holder of any such Permit, (d) no such Permits contain any restrictions, either individually or in the aggregate, that are materially burdensome to any Loan Party, or to the operation of any of its businesses or any property owned, leased or otherwise operated by such Person, (e) each Loan Party reasonably believes that each of its Permits will be timely renewed and complied with, without material expense, and that any additional Permits that may be required of such Person will be timely obtained and complied with, without material expense and (f) neither the Initial Borrower nor the New Borrower has knowledge or reason to believe that any Governmental Authority is considering limiting, suspending, revoking or renewing on materially burdensome terms any such Permit.

(e) None of the Borrower or any of its Restricted Subsidiaries or the New Borrower has received any notice, or has any knowledge, of any pending, threatened or contemplated condemnation proceeding affecting any Real Property or any part thereof, except those that could not reasonably be expected to have a Material Adverse Effect.

(f) Each of the Loan Parties, and, to the knowledge of the Initial Borrower or the New Borrower, each other party thereto, has complied with all obligations under all leases of Real Property to which it is a party other than those the failure with which to comply could not reasonably be expected to have a Material Adverse Effect and all such leases are legal, valid, binding and in full force and effect and are enforceable in accordance with their terms other than those the failure of which to so comply with the foregoing could not reasonably be expected to have a Material Adverse Effect. No landlord Lien has been filed, and, to the knowledge of the Initial Borrower or the New Borrower, no claim is being asserted, with respect to any lease payment under any lease of Real Property other than those that could not reasonably be expected to have a Material Adverse Effect.

(g) There are no pending or, to the knowledge of the Initial Borrower or the New Borrower, proposed special or other assessments for public improvements or otherwise affecting any material portion of the owned Real Property, nor are there any contemplated improvements to such owned Real Property that may result in such special or other assessments, other than those that could not reasonably be expected to have a Material Adverse Effect.

Section 4.20 Mortgaged Vessels

Each Mortgaged Vessel (i) is owned and operated by a Guarantor, (ii) that is operated, is operated in all material respects in compliance with all Requirements of Law (including, in the case of each Mortgaged Vessel that is in class on the Effective Date, compliance in all material respects with all requirements of such classification as required by the United States Coast Guard or other classification society of like standard approved

by the Collateral Agent) and (iii) is maintained in all material respects in accordance with all requirements set forth in the Collateral Documents. Each Mortgaged Vessel is covered by all such insurance as is required by the respective Mortgage with respect to such Mortgaged Vessel.

ARTICLE V

FINANCIAL COVENANTS

The Borrower agrees with the Lenders, the Issuers and the Administrative Agent to each of the following as long as any Obligation or any Revolving Commitment remains outstanding and, in each case, unless the Requisite Lenders otherwise consent in writing:

Section 5.1 Maximum Leverage Ratio

The Borrower shall not permit the Leverage Ratio, as determined as of the last day of each Fiscal Quarter, for the four Fiscal Quarters ending on such day, to be more than 2.50:1.00.

Section 5.2 Minimum Interest Coverage Ratio

The Borrower shall not permit the Interest Coverage Ratio, as determined as of the last day of each Fiscal Quarter, for the four Fiscal Quarters ending on such day, to be less than 4.00:1.00 for such four Fiscal Quarter period.

ARTICLE VI

REPORTING COVENANTS

The Borrower agrees with the Lenders and the Administrative Agent to each of the following, as long as any Obligation or any Revolving Commitment remains outstanding and, in each case, unless the Requisite Lenders otherwise consent in writing:

Section 6.1 Financial Statements

The Borrower shall furnish to the Administrative Agent each of the following:

(a) Quarterly Reports. Within 45 days after the end of each of the first three Fiscal Quarters of each Fiscal Year (unless such period is extended pursuant to SEC guidelines), consolidated unaudited balance sheets as of the close of such quarter and the related statements of income and cash flow for such quarter and that portion of the Fiscal Year ending as of the close of such quarter, setting forth in comparative form the figures for the corresponding period in the prior year, in each case certified by a Responsible Officer of the Borrower as fairly presenting in all material respects the consolidated financial condition of the Borrower and its Subsidiaries as at the dates indicated and the results of their operations and cash flow for the periods indicated in accordance with

GAAP (subject to the absence of footnote disclosure and normal year-end audit adjustments).

(b) Annual Reports. Within 75 days after the end of each Fiscal Year (unless such period is extended pursuant to SEC guidelines), consolidated balance sheets of the Borrower and its Subsidiaries as of the end of such Fiscal Year and related statements of income and cash flows of the Borrower and its Subsidiaries for such Fiscal Year, all prepared in conformity with GAAP and certified, in the case of such consolidated financial statements, without qualification as to the scope of the audit or as to the Borrower being a going concern by the Borrower’s Accountants, together with the report of such accounting firm stating that (i) such financial statements fairly present in all material respects the consolidated financial condition of the Borrower and its Subsidiaries as at the dates indicated and the results of their operations and cash flow for the periods indicated in conformity with GAAP applied on a basis consistent with prior years (except for changes with which the Borrower’s Accountants shall concur and that shall have been disclosed in the notes to the financial statements) and (ii) the examination by the Borrower’s Accountants in connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards.

(c) Compliance Certificate. Together with each delivery of any financial statement pursuant to clause (a) or (b) above, a certificate of a Responsible Officer of the Borrower substantially in the form of Exhibit H (each, a “Compliance Certificate”) (i) showing in reasonable detail the calculations used in determining the Leverage Ratio and demonstrating compliance with each of the other financial covenants contained in Article V (Financial Covenants), (ii) identifying any Asset Sale permitted by clauses (h), (i), or (j) of Section 8.4 during the Fiscal Quarter as to which such Compliance Certificate relates (or, in the case of any Compliance Certificate delivered in connection with the financial statements delivered pursuant to clause (b) above, in the last Fiscal Quarter of such Fiscal Year to which such Compliance Certificate relates) and identifying the aggregate consideration received in connection with each such identified Asset Sale if the aggregate consideration received for such Asset Sale exceeds $2,500,000.00 and (iii) stating that no Default or Event of Default has occurred and is continuing or, if a Default or an Event of Default has occurred and is continuing, stating the nature thereof and the action which the Borrower has taken or proposes to take with respect thereto.

(d) Budget. Not later than 90 days after the end of each Fiscal Year, and containing substantially the types of financial information contained in the Projections, the annual budget of the Borrower for the Fiscal Year next succeeding such Fiscal Year then ended reviewed by the Board of Directors of the Borrower, including a projected year-end consolidated balance sheet and income statement and statement of cash flows.

Section 6.2 Collateral Reporting Requirements

The Borrower shall furnish to the Administrative Agent each of the following:

(a) Updated Corporate Chart. If requested by the Administrative Agent, together with each delivery of any financial statement pursuant to Section 6.1(b) (Annual Reports), a corporate organizational chart or other equivalent list, current as of the date of delivery, in form and substance reasonably acceptable to the Administrative Agent, setting forth, for each of the Loan Parties, all Persons subject to Section 7.11 (Additional Collateral and Guaranties), all Subsidiaries of any of them and any Joint Ventures entered into by any of the foregoing, (i) its full legal name, (ii) its jurisdiction of organization and organizational number (if any) and (iii) the number of shares of each class of its Stock authorized (if applicable), the number outstanding as of the date of delivery, and the number and percentage of the outstanding shares of each such class owned (directly or indirectly) by the Borrower.

(b) Additional Information. From time to time, statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral, all as the Administrative Agent may reasonably request, and in reasonable detail.

(c) Additional Filings. At any time and from time to time, upon the reasonable written request of the Administrative Agent, and at the sole expense of the Loan Parties, duly executed, delivered and recorded instruments and documents for the purpose of obtaining or preserving the full benefits of this Agreement, the Pledge and Security Agreement and each other Loan Document and of the rights and powers herein and therein granted (and each Loan Party shall take such further action as the Administrative Agent may reasonably request for such purpose, including the filing of any financing or continuation statement under the UCC or other similar Requirement of Law in effect in any domestic jurisdiction with respect to the security interest created by the Pledge and Security Agreement but excluding (i) the execution and delivery of any control agreements with respect to deposit accounts or securities accounts, (ii) any filings to perfect Liens on intellectual property, other than any such filings under the UCC or with the U.S. Patent and Trademark Office or U.S. Copyright Office, and (iii) any filings or actions in any jurisdiction outside the United States of America, other than filings with applicable Governmental Authorities in respect of the Mortgaged Vessels.

(d) Mortgaged Vessels. If requested by the Administrative Agent, an operating report for the Mortgaged Vessels showing the current customers of such vessels and the current locations of such vessels. In addition, if requested by the Administrative Agent, the Borrower shall give the Administrative Agent written notice of (i) any Mortgaged Vessel commencing a new contract or moving to a work site outside the U.S. Gulf of Mexico (ii) any bareboat charters of any Mortgaged Vessel and copies of such charter.

The reporting requirements set forth in this Section 6.2 are in addition to, and shall not modify and are not in replacement of, any rights and other obligation set forth in any Loan Document (including notice and reporting requirements) and satisfaction of the reporting obligations in this Section 6.2 shall not, by itself, operate as an update of any Schedule or any schedule of any other Loan Document and shall not cure, or otherwise affect in any way, any Default or Event of Default, including any failure of any

representation or warranty of any Loan Document to be correct in any respect when made.

Section 6.3 Default Notices

Promptly and in any event within five Business Days after a Responsible Officer of the Borrower obtains actual knowledge of the existence thereof, the Borrower shall give the Administrative Agent notice:

(a) of any Default or Event of Default specifying the details of the occurrence referred to therein, describing with particularity any and all provisions of this Agreement and any other Loan Document that have been breached, the anticipated effect thereof, and stating what action the Borrower has taken and proposes to take with respect thereto; and

(b) of any announcement by Moody’s or S&P of any change in a corporate rating or corporate family rating with respect to the Borrower or with respect to the Loans under this Agreement that has not been publicly announced or is not otherwise publicly available.

Each notice pursuant to this Section 6.3, if given by telephone, shall be promptly confirmed in writing on the next Business Day.

Section 6.4 Litigation

Promptly after a Responsible Officer of the Borrower obtains actual knowledge of the commencement thereof, the Borrower shall give the Administrative Agent written notice of the commencement of all actions, suits and proceedings before any domestic or foreign Governmental Authority or arbitrator, regarding the Borrower, any of its Subsidiaries or any Joint Venture that (i) seeks injunctive or similar relief that, in the reasonable judgment of the Borrower, if adversely determined, could reasonably be expected to result in a Material Adverse Effect or (ii) in the reasonable judgment of the Borrower could expose the Borrower, such Subsidiary or such Joint Venture to liability in an amount aggregating $35,000,000.00 or more or that, if adversely determined, could reasonably be expected to have a Material Adverse Effect.

Section 6.5 Labor Relations

Promptly after a Responsible Officer of the Borrower has actual knowledge of the same, the Borrower shall give the Administrative Agent written notice of (a) any material labor dispute to which the Borrower or any of its Subsidiaries is a party, including any strikes, lockouts or other material disputes relating to any of such Person’s plants and other facilities, provided that such dispute, strike or lockout involves a work stoppage exceeding 30 days, (b) any material Worker Adjustment and Retraining Notification Act or related liability incurred with respect to the closing of any plant or other facility of any such Person affecting 300 or more employees of the Borrower and its Subsidiaries and (c) any union organization activity with respect to employees of the Borrower or any of its Subsidiaries not covered by a collective bargaining agreement as of the Effective Date.

Section 6.6 Tax Returns

Upon the reasonable request of any Lender through the Administrative Agent, the Borrower shall provide copies of all federal, state, local and foreign tax returns and reports filed by the Borrower, any of its Subsidiaries or any Joint Venture in respect of taxes measured by income (excluding sales, use and like taxes).

Section 6.7 Insurance

As soon as is practicable and in any event within 90 days after the end of each Fiscal Year, the Borrower shall furnish the Administrative Agent with a report on the standard “Acord” form outlining all material insurance coverage maintained as of the date of such report by the Borrower and its Restricted Subsidiaries and the duration of such coverage.

Section 6.8 ERISA Matters

The Borrower shall furnish the Administrative Agent with each of the following:

(a) promptly and in any event within 30 days after a Responsible Officer of the Borrower knows, or has reason to know, that any ERISA Event has occurred that, alone or together with any other ERISA Event, could reasonably be expected to result in liability of the Borrower, any Subsidiary of the Borrower, any Guarantor and/or any ERISA Affiliate in an aggregate amount exceeding $15,000,000.00, written notice describing the nature thereof, what action the Borrower, any of its Subsidiaries, any Guarantor or any of their respective ERISA Affiliates has taken, is taking or proposes to take with respect thereto and, when known by such Responsible Officer, any action taken or threatened by the IRS, the Department of Labor or the PBGC with respect to such event;

(b) promptly and in any event within 10 days after a Responsible Officer of the Borrower knows, or has reason to know, that a request for a minimum funding waiver under Section 412 of the Code has been filed with respect to any Title IV Plan, a written statement of an Authorized Officer of the Borrower describing such waiver request and the action, if any, the Borrower, its Subsidiaries and ERISA Affiliates propose to take with respect thereto and a copy of any notice filed with the PBGC or the IRS pertaining thereto;

(c) simultaneously with the date that the Borrower, any of its Subsidiaries or any ERISA Affiliate files with the PBGC a notice of intent to terminate any Title IV Plan, if, at the time of such filing, such termination would require material additional contributions in order to be considered a standard termination within the meaning of Section 4041(b) of ERISA, a copy of each notice; and

(d) promptly, copies of (i) each Schedule B (Actuarial Information) to the annual report (Form 5500 Series) filed by the Borrower, any of its Subsidiaries, any Guarantor or any of their respective ERISA Affiliates with the IRS with respect to each Title IV Plan; (ii) all notices received by the Borrower, any of its Subsidiaries, any

Guarantor or any of their respective ERISA Affiliates from a Multiemployer Plan sponsor concerning an ERISA Event that, alone or together with any other ERISA Event, could reasonably be expected to result in liability of the Borrower, any Subsidiary of the Borrower, any Guarantor and/or any ERISA Affiliate in an aggregate amount exceeding $15,000,000.00; and (iii) copies of such other documents or governmental reports or filings relating to any Employee Benefit Plan as the Administrative Agent shall reasonably request.

Section 6.9 Environmental Matters

The Borrower shall provide the Administrative Agent promptly, and in any event within 10 Business Days after any Responsible Officer of the Borrower obtains actual knowledge of any of the following, written notice of each of the following:

(a) that any Loan Party or any Mortgaged Vessel is or may be liable to any Person as a result of a Release or threatened Release that could reasonably be expected to subject such Loan Party to Environmental Liabilities and Costs of $10,000,000.00 or more;

(b) the receipt by any Loan Party of notification that any material real or personal property or any Mortgaged Vessel of such Loan Party is or is reasonably likely to be subject to any Environmental Lien;

(c) the receipt by any Loan Party of any notice of violation of or potential liability under, or knowledge by a Responsible Officer of the Borrower that there exists a condition that could reasonably be expected to result in a violation of or liability under, any Environmental Law, except for violations and liabilities the consequence of which, in the aggregate, could not reasonably be expected to subject the Loan Parties collectively to Environmental Liabilities and Costs of $10,000,000.00 or more; and

(d) promptly following reasonable written request by any Lender through the Administrative Agent, a report providing an update of the status of any environmental, health or safety compliance, hazard or liability issue identified in any notice or report delivered pursuant to this Section 6.9.

Section 6.10 Patriot Act Information

Each Lender and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act, it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower in accordance with the USA Patriot Act. The Borrower shall promptly, following a request by any Agent or any Lender, provide all documentation and other information that such Agent or such Lender reasonably requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-

money laundering rules and regulations, including, without limitation, the USA Patriot Act.

Section 6.11 Other Information

The Borrower shall provide the Administrative Agent or any Lender with such other information respecting the business, properties, condition, financial or otherwise, or operations of the Borrower, any of its Subsidiaries or any Joint Venture as the Administrative Agent or such Lender through the Administrative Agent may from time to time reasonably request. The Administrative Agent shall provide copies of any written information provided to it pursuant to this Article VI (Reporting Covenants) to any Lender requesting the same.

Section 6.12 Existing Babcock Guaranties

(a) The Existing Babcock Guaranties are all of the Guaranty Obligations on the Effective Date of the New Borrower and its Subsidiaries (other than the Babcock Entities) in respect of any obligations of any of the Babcock Entities and (b) on or before the Effective Date, the Borrower has delivered to the Administrative Agent true copies of each Existing Babcock Guaranty, including all amendments thereto.

ARTICLE VII

AFFIRMATIVE COVENANTS

Section 7.1 Preservation of Corporate Existence, Etc.

The Borrower shall, and shall cause each of its Subsidiaries to, preserve and maintain its legal existence, rights (charter and statutory) and franchises, except as permitted by Sections 8.4 (Sale of Assets), 8.5 (Restricted Payments) and 8.6 (Restriction on Fundamental Changes) and except if, in the reasonable business judgment of the Borrower, it is in the business interest of the Borrower or such Subsidiary not to preserve and maintain such legal existence (except with respect to the Borrower), rights (charter and statutory) and franchises, and such failure to preserve the same could not reasonably be expected to have a Material Adverse Effect and could not reasonably be expected to materially affect the interests of the Secured Parties under the Loan Documents or the rights and interests of any of them in the Collateral.

Section 7.2 Compliance with Laws, Etc.

The Borrower shall, and shall cause each of its Subsidiaries to, comply with all applicable Requirements of Law, Contractual Obligations and Permits, except where the failure so to comply could not reasonably be expected to have a Material Adverse Effect.

Section 7.3 Conduct of Business

The Borrower shall, and shall cause each of its Subsidiaries to, (a) conduct its business in the ordinary course (except for non-material changes in the nature or conduct of its business as carried on as of the Effective Date) and (b) use its reasonable efforts, in the ordinary course, to preserve its business and the goodwill and business of the customers, suppliers and others having business relations with the Borrower or any of its Subsidiaries, except where the failure to comply with the covenants in each of clauses (a) and (b) above could not reasonably be expected to have a Material Adverse Effect.

Section 7.4 Payment of Taxes, Etc.

The Borrower shall, and shall cause each of its Subsidiaries to, pay and discharge before the same shall become delinquent, all lawful governmental claims, taxes, assessments, charges and levies, except where (a) contested in good faith, by proper proceedings and adequate reserves therefor have been established on the books of the Borrower or the appropriate Subsidiary in conformity with GAAP or (b) the failure to so pay and discharge could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 7.5 Maintenance of Insurance

The Borrower shall, and shall cause each of its Restricted Subsidiaries to, (a) maintain insurance with responsible and reputable insurance companies or associations in such amounts and covering such risks as, in the reasonable determination of the Borrower, is usually carried by companies engaged in similar businesses and owning similar properties in the same general areas in which the Borrower or such Subsidiary operates; provided, that, with respect to the Mortgaged Vessels, the Borrower shall be required to provide or cause to be provided only such insurance as is required by the Collateral Documents, and (b) cause all property and general liability insurance policies to name the Collateral Agent on behalf of the Secured Parties as additional insured (with respect to liability and property policies), loss payee (with respect to property policies) or lender’s loss payee (with respect to property policies), as appropriate, and to provide that no cancellation, material addition in amount or material change in coverage shall be effective until after 30 days’ written notice thereof to the Administrative Agent. Subject to the following sentence, so long as an Event of Default is not then continuing, the Collateral Agent, on behalf of the Secured Parties, agrees to promptly release, endorse and turn over to the Borrower or the applicable Subsidiary any insurance proceeds received by the Collateral Agent. If such insurance proceeds are the result of a casualty event with respect to any Mortgaged Vessel, the Borrower shall, or shall cause its Subsidiaries to, use such proceeds to, within one year of receipt of such proceeds, (i) acquire one or more Mortgaged Vessels, (ii) make capital expenditures in respect of one or more Mortgaged Vessels or Mortgaged Properties, or (iii) reduce the Revolving Commitments as set forth in Section 2.9(b) (Mandatory Prepayments).

Section 7.6 Access

The Borrower shall from time to time during normal business hours permit the Administrative Agent and the Lenders, or any agents or representatives thereof, within five Business Days after written notification of the same (except that during the continuance of an Event of Default, no such notice shall be required) to (a) examine and make copies of and abstracts from the records and books of account of the Borrower and each of its Subsidiaries, (b) visit the properties of the Borrower and each of its Subsidiaries, (c) discuss the affairs, finances and accounts of the Borrower and each of its Subsidiaries with any of their respective officers or directors; provided, that the Borrower will not be required to permit any examination or visit as set forth in clauses (a) and (b) above with respect to each of the Administrative Agent and the Lenders (or any agents or representatives thereof) (i) within the twelve-month period following the date of the most recent examination or visit by any Lender or the Administrative Agent (or any agents or representatives thereof), as applicable, unless an Event of Default has occurred and is continuing and (ii) unless such visit is coordinated through the Administrative Agent.

Section 7.7 Keeping of Books

The Borrower shall, and shall cause each of its Subsidiaries to, keep proper books of record and account, in which full and correct entries shall be made of the financial transactions and assets and business of the Borrower and each of its Subsidiaries; provided that the consolidated books of the Borrower and its Subsidiaries shall be in conformity with GAAP on a consolidated basis.

Section 7.8 Maintenance of Properties, Etc.

The Borrower shall, and shall cause each of its Subsidiaries to, maintain and preserve (a) in good working order and condition (ordinary wear and tear excepted) all of its properties necessary in the conduct of its business, (b) all rights, permits, licenses, approvals and privileges (including all Permits) necessary in the conduct of its business and (c) all Material Intellectual Property, except where failure to so maintain and preserve the items set forth in clauses (a), (b) and (c) above could not reasonably be expected to have a Material Adverse Effect; provided, that, with respect to the Mortgaged Vessels, the Borrower will, or will cause the Mortgaged Vessel Owning Subsidiaries to, maintain and keep such Mortgaged Vessels in such condition, repair and working order as is required by the Collateral Documents.

Section 7.9 Application of Proceeds

The Borrower shall use the entire amount of the proceeds of the Loans as provided in Section 4.13 (Use of Proceeds).

Section 7.10 Environmental

(a) The Borrower shall, and shall cause each of its Subsidiaries to, exercise reasonable due diligence in order to comply in all material respects with all Environmental Laws.

(b) The Borrower agrees that the Administrative Agent may, from time to time, retain, at the expense of the Borrower, an independent professional consultant reasonably acceptable to the Borrower to review any report relating to Contaminants prepared by or for the Borrower and to conduct its own investigation (the scope of which investigation shall be reasonable based upon the circumstances) of any property currently owned, leased, operated or used by the Borrower or any of its Subsidiaries, if (x) a Default or an Event of Default shall have occurred and be continuing, or (y) the Administrative Agent reasonably believes (1) that an occurrence relating to such property is likely to give rise to any Environmental Liabilities and Costs or (2) that a violation of an Environmental Law on or around such property has occurred or is likely to occur, which could, in either such case, reasonably be expected to result in Environmental Liabilities and Costs in excess of $10,000,000.00, provided that, unless an Event of Default shall have occurred and be continuing, such consultant shall not drill on any property of the Borrower or any of its Subsidiaries without the Borrower’s prior written consent. The Borrower shall use its reasonable efforts to obtain for the Administrative Agent and its agents, employees, consultants and contractors the right, upon reasonable notice to Borrower, to enter into or on to the facilities or Mortgaged Vessels currently owned, leased, operated or used by Borrower or any of its Subsidiaries to perform such tests on such property as are reasonably necessary to conduct such a review and/or investigation. Any such investigation of any property shall be conducted, unless otherwise agreed to by Borrower and the Administrative Agent, during normal business hours and shall be conducted so as not to unreasonably interfere with the ongoing operations at any such property or Mortgaged Vessel or to cause any damage or loss at such property or Mortgaged Vessel. Borrower and the Administrative Agent hereby acknowledge and agree that any report of any investigation conducted at the request of the Administrative Agent pursuant to this subsection will be obtained and shall be used by the Administrative Agent and the Lenders for the purposes of the Lenders’ internal credit decisions, to monitor the Loans and to protect the Lenders’ security interests created by the Loan Documents, and the Administrative Agent and the Lenders hereby acknowledge and agree any such report will be kept confidential by them to the extent permitted by law except as provided in the following sentence. The Administrative Agent agrees to deliver a copy of any such report to Borrower with the understanding that Borrower acknowledges and agrees that (i) it will indemnify and hold harmless the Administrative Agent and each Lender from any costs, losses or liabilities relating to Borrower’s use of or reliance on such report, (ii) neither Administrative Agent nor any Lender makes any representation or warranty with respect to such report, and (iii) by delivering such report to Borrower, neither the Administrative Agent nor any Lender is requiring or recommending the implementation of any suggestions or recommendations contained in such report.

(c) Promptly after a Responsible Officer of the Borrower obtains actual knowledge thereof, the Borrower shall advise the Administrative Agent in writing and in reasonable detail of (i) any Release or threatened Release of any Contaminants required to be reported by Borrower or its Subsidiaries, to any Governmental Authorities under any applicable Environmental Laws and which could reasonably be expected to have Environmental Liabilities and Costs in excess of $10,000,000.00, (ii) any and all written communications with respect to any pending or threatened claims under

Environmental Law in each such case which, individually or in the aggregate, have a reasonable possibility of giving rise to Environmental Liabilities and Costs in excess of $10,000,000.00, (iii) any Remedial Action performed by Borrower or any other Person in response to (x) any Contaminants on, under or about any property, the existence of which has a reasonable possibility of resulting in Environmental Liabilities and Costs in excess of $10,000,000.00, or (y) any other Environmental Liabilities and Costs in excess of $10,000,000.00 that could result in Environmental Liabilities and Costs in excess of $10,000,000.00, (iv) discovery by Borrower or its Subsidiaries of any occurrence or condition on any material property that could cause Borrower’s or its Subsidiaries’ interest in any such property to be subject to any material restrictions on the ownership, occupancy, transferability or use thereof under any applicable Environmental Laws or Environmental Liens, and (v) any written request for information from any Governmental Authority that fairly suggests such Governmental Authority is investigating whether Borrower or any of its Subsidiaries may be potentially responsible for a Release or threatened Release of Contaminants which has a reasonable possibility of giving rise to Environmental Liabilities and Costs in excess of $10,000,000.00.

(d) Borrower shall promptly notify the Administrative Agent of (i) any proposed acquisition of Stock, assets, or property by Borrower or any of its Subsidiaries that could reasonably be expected to expose Borrower or any of its Subsidiaries to, or result in, Environmental Liabilities and Costs in excess of $10,000,000.00 and (ii) any proposed action to be taken by Borrower or any of its Subsidiaries to commence manufacturing, industrial or other similar operations that could reasonably be expected to subject Borrower or any of its Subsidiaries to additional Environmental Laws, that are materially different from the Environmental Laws applicable to the operations of Borrower or any of its Subsidiaries as of the Effective Date.

(e) Borrower shall, at its own expense, provide copies of such documents or information as the Administrative Agent may reasonably request in relation to any matters disclosed pursuant to this Section 7.10.

(f) To the extent required by Environmental Laws or Governmental Authorities under applicable Environmental Laws, Borrower shall promptly take, and shall cause each of its Subsidiaries promptly to take, any and all necessary Remedial Action in connection with the presence, handling, storage, use, disposal, transportation or Release or threatened Release of any Contaminants on, under or affecting any property in order to comply in all material respects with all applicable Environmental Laws and Governmental Authorizations. In the event Borrower or any of its Subsidiaries undertakes any Remedial Action with respect to the presence, Release or threatened Release of any Contaminants on or affecting any property, Borrower or any of its Subsidiaries shall conduct and complete such Remedial Action in material compliance with all applicable Environmental Laws, and in material accordance with the applicable policies, orders and directives of all relevant Governmental Authorities except when, and only to the extent that, Borrower or any such Subsidiaries’ liability for such presence, handling, storage, use, disposal, transportation or Release or threatened Release of any Contaminants is being contested in good faith by Borrower or any of such Subsidiaries. In the event Borrower fails to take required actions to address such Release or threatened

Release of Contaminants or to address a violation of or liability under Environmental Law, the Administrative Agent may, upon providing the Borrower with 5 Business Days’ prior written notice, enter the property and, at Borrower’s sole expense, perform whatever action the Administrative Agent reasonably deems prudent to rectify the situation.

Section 7.11 Additional Collateral and Guaranties; Collateral Fall-away

(a) To the extent not delivered to the Administrative Agent on or before the Effective Date, the Borrower agrees to do promptly each of the following:

(i) execute and deliver to the Administrative Agent such amendments to the Collateral Documents or enter into such new Collateral Documents as the Administrative Agent deems necessary or advisable in order to grant to the Collateral Agent, for the ratable benefit of the Secured Parties, a perfected first-priority security interest in the Stock and Stock Equivalents and other debt Securities of any Subsidiary that are owned by the Borrower or any Guarantor; provided that no such actions shall be required in any jurisdiction other than (A) the United States of America or (B) at the reasonable request of the Administrative Agent, any jurisdiction in which a Mortgaged Vessel Owning Subsidiary is formed;

(ii) deliver to the Administrative Agent the certificates (if any) representing such Stock and Stock Equivalents and other debt Securities, together with (A) in the case of such certificated Stock and Stock Equivalents, undated stock powers or other instruments of transfer endorsed in blank and (B) in the case of such certificated debt Securities, endorsed in blank, in each case executed and delivered by a Responsible Officer of the Borrower or such Subsidiary, as the case may be;

(iii) in the case of any Wholly-Owned Subsidiary of any Loan Party that is a Restricted Subsidiary that has satisfied the Threshold Amount, cause such Wholly-Owned Subsidiary (A) to become a party to the Pledge and Security Agreement and the applicable Collateral Documents and (B) to take such actions necessary or advisable to grant to the Administrative Agent, for the ratable benefit of the Secured Parties, a perfected security interest in the Collateral described in the Collateral Documents with respect to such Subsidiary, including the filing of UCC financing statements in such jurisdictions as may be required by the Collateral Documents or by law or as may be reasonably requested by the Administrative Agent; provided that no such actions shall be required in any jurisdiction outside the United States of America;

(iv) if the Borrower or any Guarantor acquires any marine vessel with a Fair Market Value in excess of $10,000,000.00 (other than a marine vessel acquired with Indebtedness permitted by Section 8.1(d) (Indebtedness)), then the Borrower or the applicable Subsidiary (as applicable) shall, within 20

Business Days of such acquisition, execute and deliver such mortgages and other security instruments as shall be necessary to cause such vessel to become a Mortgaged Vessel subject to a perfected first-priority security interest;

(v) if the Fair Market Value of any marine vessel owned by the Borrower or any Guarantor (other than a marine vessel acquired or improved with Indebtedness permitted by Section 8.1(d) (Indebtedness)) increases to an amount in excess of $10,000,000.00 because of improvements to such marine vessel, then the Borrower or the applicable Subsidiary (as applicable) shall, within 20 Business Days of a Responsible Officer of the Borrower learning of such increase in Fair Market Value, execute and deliver such mortgages and other security instruments as shall be necessary to cause such vessel to become a Mortgaged Vessel subject to a perfected first-priority security interest;

(vi) if requested by the Administrative Agent, deliver to the Administrative Agent legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Agent; provided that such legal opinions shall be no broader in form or scope than the legal opinions delivered on the Effective Date.

(b) (i) Promptly after the Release Date, so long as no Default or Event of Default has occurred and is continuing (A) the provisions of clause (a) above shall be terminated and (B) the Collateral Agent shall release all of the Collateral.

(ii) (A) Upon the Spring-Back Date, the provisions of clause (a) above shall be reinstated and (B) within 30 days after the Spring-Back Date, the Borrower shall deliver, or cause to be delivered, to the Administrative Agent each of the items referred to in Section 3.1(d) (Collateral Documents) (as though references therein to the “Effective Date” referred to the date 30 days after the Spring-Back Date) and such legal opinions and other documentation as the Administrative Agent shall reasonably request in, each in a form reasonably acceptable to the Administrative Agent.

Section 7.12 Real Property

With respect to any fee interest in any Real Property located in the United States of America with a reasonably estimated Fair Market Value of $3,000,000.00 or more, or any leasehold interest in any Real Property located in the United States of America (other than an office lease) leased for more than $1,000,000.00 annually, acquired or leased after the Effective Date by the Borrower or any other Loan Party (other than any such Real Property acquired with Indebtedness permitted by Section 8.1(d) or (g) (Indebtedness)), Borrower or the applicable Loan Party shall promptly (and, in any event, within five Business Days following the date of such acquisition) (i) execute and deliver a first priority Mortgage (subject only to Liens permitted by this Agreement) in favor of the Collateral Agent, for the benefit of the Secured Parties, covering such Real Property and complying with the provisions herein and in the Collateral Documents, (ii) provide the Secured Parties with title insurance in an amount at least equal to the purchase price

of such Real Property (or such other amount as the Administrative Agent shall reasonably specify), and if applicable, flood insurance and lease estoppel certificates, all in accordance with the standards for deliveries contemplated on the Effective Date, as described in Sections 3.1(k) (Title Insurance) and (m) (Flood Insurance) hereof, and (iii) if requested by the Administrative Agent, deliver to the Administrative Agent and the Collateral Agent legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent and the Collateral Agent; provided, that such legal opinions shall be no broader in form or scope than the legal opinions delivered on the Effective Date and (iv) if requested by the Administrative Agent, use commercially reasonable efforts to obtain Landlord Lien Waivers for each Real Property leasehold interest located in the United States of America on which a manufacturing facility or warehouse or other facility (other than an office lease) where Collateral is stored or held; provided, however that no such Landlord Lien Waiver shall be required for any location at which Collateral is stored or located unless the aggregate value of Collateral stored or held at such location exceeds $1,000,000.00.

Section 7.13 Ratings

The Borrower shall use commercially reasonable efforts to maintain a rating of the Loans by each of S&P and Moody’s.

Section 7.14 Cancellation of Existing Babcock Guaranties

(a) The New Borrower and the Borrower will use commercially reasonable efforts to have each of the Existing Babcock Guaranties canceled.

(b) The Borrower shall promptly and in any event within three Business Days after receipt of a written demand under an Existing Babcock Guaranty deliver to the Administrative Agent and the Lenders a copy of such demand.

Section 7.15 Post-Closing Covenants

(a) Within 60 days after the Effective Date (or such longer period as the Administrative Agent may determine in its sole discretion), the Borrower shall have delivered to the Administrative Agent (i) a fully executed Mortgage in favor of the Collateral Agent with respect to the McDermott Derrick Barge No. 26, (ii) a supplement to the Pledge and Security Agreement whereby Barmada McDermott (L) Limited becomes a grantor thereunder and a Guarantor, (iii) an abstract of title or, at Administrative Agent’s discretion, a certificate of ownership or other similar document with respect to the McDermott Derrick Barge No. 26 which reveal no Liens on such Mortgaged Vessel (subject to any Lien expressly permitted by Section 8.2 (Liens, Etc.)) other than the Lien of the Mortgage and (iv) an accompanying opinion from the Borrower’s special Malaysian counsel in form and substance reasonably satisfactory to the Administrative Agent. Notwithstanding anything to the contrary contained herein (including, without limitation, the definitions of Mortgaged Vessel and Mortgaged Vessel Owning Subsidiary) or in any other Loan Document, until such time as the Borrower

shall have satisfied the requirements set forth in clauses (i) and (ii) of the immediately preceding sentence, (x) Barmada McDermott (L) Limited shall not be considered a Guarantor or Mortgaged Vessel Owning Subsidiary for any purposes hereunder or in any other Loan Document, and (y) the McDermott Derrick Barge No. 26 shall not be considered a Mortgaged Vessel for any purposes hereunder or in any other Loan Document.

(b) By September 1, 2010 (or such later date as the Administrative Agent may determine in its sole discretion), the Borrower shall have delivered to the Administrative Agent a copy of a full term confirmation of class certificate issued by the American Bureau of Shipping (or another classification society acceptable to the Administrative Agent in its sole discretion) showing no recommendations affecting class with respect to McDermott LB 32.

(c) By May 15, 2010 (or such later date as the Administrative Agent may determine in its sole discretion), the Administrative Agent shall have received a certificate as to the good standing of each Loan Party organized in Mexico, Nigeria, Indonesia or Kazakhstan dated as of a recent date from the appropriate governmental authority of the jurisdiction of its organization, unless such good standing certificates are inapplicable in such jurisdiction.

(d) Within 30 days after the Effective Date (or such longer period as the Administrative Agent may determine in its sole discretion), the Borrower shall have delivered to the Administrative Agent (i) a fully executed amendment to the First Naval Fleet Mortgage executed by Hydro Marine Services, Inc., as Shipowner, and Collateral Agent, as Mortgagee, with respect to the McDermott LB 32 and which adds the McDermott LB 32 to the Vessels secured under such Mortgage, (ii) an abstract of title or, at Administrative Agent’s discretion, a certificate of ownership or other similar document with respect to the McDermott LB 32 which reveal no Liens on such Mortgaged Vessel (subject to any Lien expressly permitted by Section 8.2 (Liens, Etc.)) other the Lien of the First Naval Fleet Mortgage, as amended and (iii) an accompanying opinion from special Panamanian counsel in form and substance reasonably satisfactory to the Administrative Agent. Notwithstanding anything to the contrary contained herein (including, without limitation, the definitions of Mortgaged Vessel and Mortgaged Vessel Owning Subsidiary) or in any other Loan Document, until such time as the Borrower shall have satisfied the requirements set forth in clauses (i) of the immediately preceding sentence, the McDermott LB 32 shall not be considered a Mortgaged Vessel for any purposes hereunder or in any other Loan Document.

(e) Within 20 days after the Effective Date (or such longer period as the Administrative Agent may determine in its sole discretion), the Borrower shall have delivered to the Administrative Agent (i) a fully executed Mortgage(s) with respect to each of the Acadian Sea, the Agile, the Bold Endurance and the Emerald Sea, (ii) an abstract of title or, at Administrative Agent’s discretion, a certificate of ownership or other similar document with respect to the Acadian Sea, the Agile, the Bold Endurance and the Emerald Sea which reveal no Liens on such Mortgaged Vessels (subject to any Lien expressly permitted by Section 8.2 (Liens, Etc.)) other than the Lien of the

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Mortgage(s) and (iii) an accompanying opinion from special Barbadian counsel in form and substance reasonably satisfactory to the Administrative Agent. In connection with issuing the Mortgages for the foregoing Barbadian flagged vessels, Borrower will execute and deliver all such documents as necessary or desirable to register the Mortgages in the London Ships Registry and the Barbados Companies Registry, including, but not limited to, executing the prescribed mortgage forms, Deeds of Covenants and Statements of Charge.

(f) Within five months after the Effective Date (or such longer period as the Administrative Agent may determine in its sole discretion), the Borrower shall have completed, or shall have caused the applicable Mortgaged Vessel Owning Subsidiary to complete, registration of any Mortgages with respect to Mortgaged Vessels flagged in Panama which only had a provisional registration of such Mortgage(s) as of the Effective Date and shall have provided an abstract of title or, at Administrative Agent’s discretion, a certificate of ownership or other similar document with respect to all Mortgaged Vessels flagged in Panama which reveal no Liens on such Mortgaged Vessels (subject to any Lien expressly permitted by Section 8.2 (Liens, Etc.)) other than the Lien of the Mortgage.

(g) Within 10 days after the Effective Date (or such longer period as the Administrative Agent may determine in its sole discretion), the Borrower shall have delivered to the Administrative Agent an opinion from the Borrower’s special Cayman Islands counsel, in form and substance reasonably satisfactory to the Administrative Agent, with respect to the Mortgaged Vessel Owning Subsidiary, J. Ray McDermott International Vessels, Ltd.

(h) Within 30 days after the Bold Endurance is no longer “laid up” (or such longer period as the Administrative Agent may determine in its sole discretion), the Borrower shall have delivered to the Administrative Agent a copy of a full term confirmation of class certificate issued by the American Bureau of Shipping (or another classification society acceptable to the Administrative Agent in its sole discretion) showing no recommendations affecting class with respect to the Bold Endurance.

(i) Within 30 days after the Effective Date (or such longer period as the Administrative Agent may determine in its sole discretion), the Borrower shall have delivered to the Administrative Agent a certificate of ownership or other similar document with respect to the McDermott Derrick Barge No. 16, the Burin Sea, the Hebron Sea, the Mariner Sea, the Panuke Sea, the Thebaud Sea, the Trinity Sea and the Venture Sea which reveal no Liens on such Mortgaged Vessel (subject to any Lien expressly permitted by Section 8.2 (Liens, Etc.)) other the Lien of their respective Mortgages.

(j) Within 60 days after the Effective Date (or such later date as the Administrative Agent may determine in its sole discretion), the Borrower shall have delivered to the Administrative Agent a copy of a full term confirmation of class certificate issued by the American Bureau of Shipping (or another classification society

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acceptable to the Administrative Agent in its sole discretion) showing no recommendations affecting class with respect to McDermott Derrick Barge No. 16.

The Spin Steps and the Spin shall be permitted notwithstanding anything to the contrary in this Article VII if the Spin is undertaken in accordance with Section 8.19 (Terms of Spin).

ARTICLE VIII

NEGATIVE COVENANTS

Section 8.1 Indebtedness

The Borrower shall not (x) and shall not permit any Captive Insurance Subsidiary or any of the Borrower’s Restricted Subsidiaries to, directly or indirectly create, incur, assume or otherwise become or remain directly or indirectly liable with respect to any Indebtedness or (y) issue Disqualified Stock except for the following:

(a) the Obligations;

(b) Indebtedness existing on the Effective Date and disclosed on Schedule 8.1 (Existing Indebtedness);

(c) Guaranty Obligations incurred by the Borrower or any Guarantor in respect of Indebtedness of the Borrower or any Guarantor that is permitted by this Section 8.1;

(d) secured Indebtedness of the Borrower or any Restricted Subsidiary, including Capital Lease Obligations and purchase money Indebtedness incurred by the Borrower or a Restricted Subsidiary of the Borrower to finance (concurrently with or within 90 days after) the acquisition of tangible property (including marine vessels), Indebtedness in respect of sale and leaseback transactions, and Indebtedness incurred or assumed in connection with an Acquisition, in an aggregate outstanding principal amount not to exceed at any time the lesser of (i) $250,000,000.00 and (ii) $400,000,000.00 minus the outstanding principal amount of Indebtedness outstanding under clause (g) below at such time;

(e) renewals, extensions, refinancings and refundings of Indebtedness permitted by clause (b) above or this clause (e) if (i) the principal amount of such Indebtedness is in an aggregate principal amount not greater than the principal amount of (plus reasonable fees, expenses and any premium incurred in connection with the renewal, extension, refinancing or refunding of) such Indebtedness, and (ii) such Indebtedness is on terms that in the aggregate are not materially less favorable to the

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Borrower or such Subsidiary, including as to weighted average maturity, than the Indebtedness being renewed, extended, refinanced or refunded;

(f) Indebtedness arising from intercompany loans that are Investments permitted under, or not prohibited by, Section 8.5 (Restricted Payments) (i) from the Borrower to any Guarantor; (ii) from any Subsidiary of the Borrower to the Borrower or any Guarantor; (iii) from any Subsidiary of the Borrower that is not a Loan Party to any Restricted Subsidiary of the Borrower that is not a Loan Party; (iv) from the Borrower or any Guarantor to any Restricted Subsidiary of the Borrower that is not a Guarantor; or (v) until the New Borrower is the Borrower, from the New Borrower or any Affiliate of the New Borrower (other than the Borrower or a Subsidiary of the Borrower) to the Borrower or any Restricted Subsidiary of the Borrower or any Guarantor; provided, however, that

(A)

all such Indebtedness of the type described in clauses (i), (ii), (iv) and (v) above is evidenced by promissory notes in the form of Exhibit G (Global Intercompany Note), subject to a first priority Lien pursuant to the Pledge and Security Agreement if the payee is the Borrower or a Guarantor,

(B)

all such Indebtedness of the type described in clause (ii) above may not be paid when an Event of Default exists, unless such payment is being made to a Loan Party,

(C)

all such Indebtedness of the type described in clause (v) above does not permit any cash payments of any kind before the payment in full of the Obligations (unless otherwise permitted pursuant to Section 8.5(e) (Restricted Payments)), and

(D)

any payment by any Guarantor under any guaranty of the Obligations shall result in a pro tanto reduction of the amount of any Indebtedness owed by such Subsidiary to the Borrower or to any of its Subsidiaries for whose benefit such payment is made.

(g) unsecured Indebtedness of the Borrower and its Restricted Subsidiaries in an aggregate outstanding principal amount not to exceed at any time (i) $400,000,000.00 minus the outstanding principal amount of Indebtedness outstanding under clause (d) above at such time, so long as immediately after giving effect to the issuance, incurrence or assumption of any such unsecured Indebtedness, the Borrower will be in pro forma compliance with Section 5.1 (Maximum Leverage Ratio) for the most recent four-quarter period for which financial statements are available;

(h) Indebtedness under or in respect of Hedging Contracts that are not speculative in nature;

(i) Indebtedness in respect of Treasury Management Arrangements;

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(j) Indebtedness in respect of any insurance premium financing for insurance being acquired by the Borrower or any Restricted Subsidiary under customary terms and conditions and not in connection with the borrowing of money;

(k) (i) Indebtedness that constitutes Indebtedness under clause (k) of the definition thereof and as a result of being secured by the Cobia Equipment; provided that neither the Borrower nor any of its Restricted Subsidiaries is the primary obligor on such Indebtedness (it being understood that the Borrower and its Restricted Subsidiaries may guarantee such Indebtedness to the extent otherwise permitted by this Agreement), (ii) Guaranty Obligations incurred by the Borrower or any Restricted Subsidiary in respect of Indebtedness of any Cobia Entity; provided that such Guaranty Obligations are Cobia Permitted Investments, and (iii) Guaranty Obligations incurred by the Borrower or any Restricted Subsidiary in respect of Hedging Contracts of any Cobia Entity; provided that such Guaranty Obligations are Cobia Permitted Investments; and

(l) Indebtedness incurred as contemplated by the Spin Steps.

Section 8.2 Liens, Etc.

The Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, create or suffer to exist any Lien upon or with respect to any of their respective properties or assets, whether now owned or hereafter acquired, or assign, or permit any of its Restricted Subsidiaries to assign, any right to receive income, except for the following:

(a) Liens created pursuant to the Loan Documents;

(b) Liens existing on the Effective Date and disclosed on Schedule 8.2 (Existing Liens);

(d) Liens securing Indebtedness permitted under Section 8.1(d) (Indebtedness):

(i) in assets that are not Collateral and, if a Release Date has occurred, were not Collateral immediately prior to the most recent Release Date;

(ii) in property subject to and acquired or constructed with the proceeds of a Capital Lease or purchase money Indebtedness (including any sale and leaseback transaction permitted under Section 8.13 (Sale/Leasebacks), in each case if (A) the Indebtedness secured thereby and is incurred within 90 days after the date of such acquisition or construction of such property and does not exceed the lesser of the cost or Fair Market Value of such property at the time of such acquisition or construction and (B) such Liens do not apply to any other property (other than proceeds of such acquired or constructed property) or assets of the Borrower or any of its Subsidiaries; or

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(iii) to which any property is subject at the time, on or after the Effective Date, of the Borrower’s or a Restricted Subsidiary’s acquisition thereof in accordance with this Agreement if such Liens do not apply to any other property (other than proceeds of such acquired property) of the Borrower or any of its Restricted Subsidiaries;

(e) any Lien securing the renewal, extension, refinancing or refunding of any Indebtedness secured by any Lien permitted by clause (b) or (d) above or this clause (e) without any material change in the assets subject to such Lien;

(f) Liens in favor of lessors securing operating leases not prohibited hereunder;

(g) Liens arising out of judgments or awards and not constituting an Event of Default under Section 9.1(g) (Events of Default);

(h) Liens encumbering inventory, work-in-process and related property in favor of customers or suppliers securing obligations and other liabilities (other than Indebtedness) to such customers or suppliers to the extent such Liens are granted in the ordinary course of business and are consistent with past business practices;

(i) Liens securing reimbursement obligations of the Borrower or a Restricted Subsidiary in respect of Performance Guarantees issued by a Person that is not the Borrower or an Affiliate of the Borrower or any Restricted Subsidiary or Joint Venture; provided, such Liens shall be limited to (i) any contract as to which such Performance Guarantee provides credit support, (ii) any accounts receivable arising out of such contract and (iii) the deposit account into which such accounts receivable are deposited (the property described in clauses (i) through (iii), collectively, the “Performance Guarantee Collateral”);

(j) Liens with respect to foreign exchange netting arrangements and other treasury or cash management arrangements to the extent incurred in the ordinary course of business and consistent with past business practices; provided, that the aggregate outstanding amount of all such obligations and liabilities secured by such Liens shall not exceed $30,000,000.00 at any time;

(k) Liens securing insurance premium financing permitted under Section 8.1(j) (Indebtedness) under customary terms and conditions; provided, that no such Lien may extend to or cover any property other than the insurance being acquired with such financing, the proceeds thereof and any unearned or refunded insurance premiums related thereto;

(l) Liens not otherwise permitted by the foregoing clauses of this Section 8.2 (Liens, Etc.) securing obligations or other liabilities (other than Indebtedness for borrowed money) of the Borrower or any Restricted Subsidiary of the Borrower; provided, however, that the aggregate outstanding amount of all such obligations and liabilities secured by such Liens shall not exceed $10,000,000.00 at any time;

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(m) Liens on Cobia Equipment securing Indebtedness of any Cobia Entity; provided that neither the Borrower nor any of its Restricted Subsidiaries is the primary obligor on such Indebtedness (it being understood that the Borrower and its Restricted Subsidiaries may guarantee such Indebtedness to the extent otherwise permitted by this Agreement); and

(n) Liens securing reimbursement obligations in respect of Extended Letters of Credit.

Section 8.3 Acquisitions

The Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, make any Acquisition except for (a) Permitted Acquisitions, (b) the Permitted Cobia Acquisition and (c) Acquisitions as contemplated by the Spin Steps.

Section 8.4 Sale of Assets

The Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, sell, convey, transfer, lease or otherwise dispose of any of their respective assets or any interest therein (including the sale or factoring of any accounts) to any Person, or permit or suffer any other Person to acquire any interest in any of their respective assets or, in the case of any Restricted Subsidiary, issue or sell any shares of such Restricted Subsidiary’s Stock or Stock Equivalent (any such disposition in excess of $1,000,000.00 per transaction or series of related transactions, being an “Asset Sale”) except for the following:

(a) the sale or disposition of inventory (including fabricated projects for customers, such as offshore production platforms and related components) in the ordinary course of business;

(b) transfers resulting from any taking or condemnation of any property of the Borrower or any of its Subsidiaries (or, as long as no Default or Event of Default has occurred and is continuing or would result therefrom, deed in lieu thereof);

(c) as long as no Default or Event of Default is continuing or would result therefrom, the sale or disposition of equipment that the Borrower reasonably determines is no longer useful in its or its Subsidiaries’ business, has become obsolete, damaged or surplus or is replaced in the ordinary course of business;

(d) as long as no Default or Event of Default is continuing or would result therefrom, the lease or sublease or chartering of property not constituting a sale and leaseback, to the extent not otherwise prohibited by this Agreement or the Mortgages;

(e) as long as no Default or Event of Default is continuing or would result therefrom, non-exclusive assignments and licenses of intellectual property of the Borrower and its Subsidiaries in the ordinary course of business;

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(f) as long as no Default or Event of Default is continuing or would result therefrom, discounts, adjustments, settlements and compromises of Accounts and contract claims in the ordinary course of business;

(g) any Asset Sale (i) to the Borrower or any Wholly-Owned Guarantor or (ii) by any Restricted Subsidiary that is not a Loan Party to the Borrower or another Restricted Subsidiary of the Borrower;

(h) as long as no Default or Event of Default is continuing or would result therefrom, any other Asset Sale (other than an Asset Sale in respect of a Mortgaged Vessel or Stock in a Mortgaged Vessel Owning Subsidiary) for Fair Market Value, at least 75% of which is payable in cash or Cash Equivalents upon such sale; provided, however, that with respect to any such Asset Sale in accordance with this clause (h), the aggregate consideration received for the sale of all assets sold in accordance with this clause (h) during any Fiscal Year, including such Asset Sale, shall not exceed $30,000,000.00 in the aggregate;

(i) in the case of the Asset Sale of one or more Mortgaged Properties or Mortgaged Vessels or Stock in a Mortgaged Vessel Owning Subsidiary or a Subsidiary which directly or indirectly owns a Mortgaged Vessel Owning Subsidiary, so long as (i) no Default or Event of Default is continuing or would result therefrom, (ii) the Asset Sale is for Fair Market Value, (iii) except to the extent that the Borrower or a Guarantor receives one or more marine vessels from another Person in trade or exchange for such assets so disposed of, at least 75% of the consideration for such Asset Sale consists of cash or Cash Equivalents received at closing of such Asset Sale, (iv) any marine vessel received from another Person in trade or exchange for such assets so disposed of shall concurrently with its acquisition be added to the Collateral pursuant to arrangements substantially similar to those made with respect to the Mortgaged Vessels on the Effective Date; and (v) the Revolving Commitments shall be permanently reduced as set forth in Section 2.5(b) (Reduction and Termination of the Revolving Commitments) by an amount equal to 100% of the Net Cash Proceeds from such Asset Sale minus the amounts that are applied by the Borrower or the applicable Subsidiary within 12 months from the later of the date of such Asset Sale or the receipt of such Net Cash Proceeds to (A) acquire (1) one or more additional marine vessels, which vessel or vessels shall concurrently with their acquisition become Collateral pursuant to arrangements substantially similar to those made with respect to Mortgaged Vessels on the Effective Date or (2) other assets in an Eligible Line of Business, which assets shall concurrently with their acquisition become Collateral on terms reasonably satisfactory to the Administrative Agent or (B) make capital expenditures to improve or repair existing Mortgaged Vessels;

(j) as long as no Default or Event of Default is continuing or would result therefrom, any Asset Sale of the Stock of any Captive Insurance Subsidiary for Fair Market Value, at least 75% of which is payable in cash or Cash Equivalents upon such sale;

(k) Asset Sales permitted by Section 8.13 (Sale/Leasebacks);

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(l) Asset Sales as contemplated by the Spin Steps; and

(m) any Cobia Permitted Asset Sale.

Section 8.5 Restricted Payments

The Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, declare, order, pay or make any sum for any Restricted Payment except for:

(a) Restricted Payments by the Borrower to any Guarantor;

(b) Restricted Payments by (i) any Restricted Subsidiary of the Borrower to the Borrower or any Guarantor or (ii) any Restricted Subsidiary that is not a Loan Party to another Restricted Subsidiary that is not a Loan Party;

(c) Restricted Payments by any Restricted Subsidiary that is not a Wholly-Owned Subsidiary to the Borrower or any Guarantor and to any other direct or indirect holders of equity interests in such Restricted Subsidiary to the extent (i) such Restricted Payments are made pro rata among the holders of the equity interests in such Restricted Subsidiary or (ii) pursuant to the terms of the joint venture, charter, bylaws or other distribution agreement for such Restricted Subsidiary in form and substance approved by the Administrative Agent (such approval not to be unreasonably withheld or delayed);

(d) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any Stock or Stock Equivalents of the Borrower or any of its Subsidiaries (i) made solely with the proceeds received from the exercise of any warrant or option or (ii) that is deemed to occur upon the cashless exercise of stock options or warrants;

(e) so long as no Default or Event of Default has occurred and is continuing, or would result therefrom, Restricted Payments (other than guarantees and indemnities for the benefit of Babcock & Wilcox Investment Company or any of its Subsidiaries) in an aggregate amount not to exceed (i) $50,000,000.00 during any Fiscal Year plus (ii) beginning in Fiscal Year 2011, the lesser of (A) the aggregate amount of Restricted Payments permitted to be made pursuant to this clause (e) in the prior Fiscal Year and not made in such prior Fiscal Year and (B) $50,000,000.00;

(f) Investments existing on the Effective Date and disclosed on Schedule 8.5 (Existing Investments), and any refinancings of such Investments to the extent constituting Indebtedness otherwise permitted under Section 8.1(b) (Indebtedness), provided such refinancing complies with the provisions of Section 8.1(e) (Indebtedness);

(g) Investments in cash and Cash Equivalents;

(h) Investments in accounts, contract rights and chattel paper (each as defined in the UCC), notes receivable and similar items arising or acquired from the sale

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of Inventory in the ordinary course of business consistent with the past practice of the Borrower and its Subsidiaries;

(i) Investments received in settlement of amounts due to the Borrower or any Restricted Subsidiary of the Borrower effected in the ordinary course of business;

(j) Investments by (i) the Borrower in any Guarantor or by any Guarantor in the Borrower or any other Guarantor or (ii) a Restricted Subsidiary of the Borrower that is not a Guarantor in the Borrower or any other Restricted Subsidiary of the Borrower;

(k) loans or advances to employees of the Borrower or any of its Subsidiaries (or guaranties of loans and advances made by a third party to employees of the Borrower or any of its Subsidiaries) in the ordinary course of business in an aggregate outstanding principal amount not to exceed $1,000,000.00 at any time;

(l) Guaranty Obligations permitted by Section 8.1 (Indebtedness);

(m) other than those disclosed on Schedule 8.5 (Existing Investments), direct or indirect Investments, including Letters of Credit and other credit support obligations, in Subsidiaries that are not Guarantors or Joint Ventures that are not Guarantors, but in each case are engaged in an Eligible Line of Business, in an aggregate amount not to exceed in any Fiscal Year (i)(A) $100,000,000.00 plus (B) beginning in Fiscal Year 2011, the lesser of (x) the amount of Investments permitted to be made pursuant to this clause (m)(i) in the prior Fiscal Year and not made in such prior Fiscal Year and (y) $100,000,000.00 plus (ii) an amount equal to any repayments, interest, returns, profits, distributions, income and similar amounts actually received in cash in any Fiscal Year beginning with Fiscal Year 2010 in respect of Investments in Subsidiaries or Joint Ventures that are not Guarantors (which amount shall not exceed the amount of such Investment valued at the fair market value of such Investment at the time such Investment was made);

(n) Investments constituting Acquisitions permitted by Section 8.3 (Acquisitions);

(o) Restricted Payments as contemplated by the Spin Steps;

(p) the Cobia Permitted Acquisition, any Cobia Permitted Asset Sale and any Cobia Permitted Investments; and

(q) the repurchase, redemption or other acquisition or retirement for value of any Stock or Stock Equivalents of the Borrower or any Subsidiary held by any current or former officer, director or employee pursuant to any equity-based compensation plan, equity subscription agreement, stock option agreement, shareholders’ agreement or similar agreement, in an aggregate amount not to exceed $10,000,000.00 in any Fiscal Year.

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Section 8.6 Restriction on Fundamental Changes

Except in connection with a Permitted Acquisition, the Cobia Permitted Acquisition or a Cobia Permitted Investment or as contemplated by the Spin Steps (but subject to the last sentence of this Section 8.6), the Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, (a) merge or consolidate with any Person (provided that, if at the time thereof and immediately after giving effect thereto no Event of Default or Default shall have occurred and be continuing (i) any Wholly-Owned Restricted Subsidiary may merge into the Borrower so long as the Borrower is the surviving company, (ii) any Wholly-Owned Restricted Subsidiary may merge into or consolidate with any other Wholly-Owned Restricted Subsidiary in a transaction in which the surviving entity is a Wholly-Owned Restricted Subsidiary and no Person other than the Borrower or a Wholly-Owned Restricted Subsidiary receives any consideration (provided that if any party to any such transaction is a Loan Party, the surviving entity of such transaction shall be a Loan Party) and (iii) any Restricted Subsidiary of the Borrower may merge with another Person in a transaction constituting an Asset Sale permitted hereunder) or (b) acquire or create any Subsidiary unless, after giving effect to such acquisition or creation, (i) the Borrower is in compliance with Section 7.11 (Additional Collateral and Guaranties) and (ii) the Investment in such Subsidiary is permitted under Section 8.5 (Restricted Payments). Notwithstanding the foregoing, the Borrower shall not, and shall not permit any of its Subsidiaries to, merge or consolidate with any Person in connection with the Cobia Permitted Acquisition or a Cobia Permitted Investment except that (x) any Subsidiary of the Borrower that is a newly formed entity created solely for the purpose of effectuating the Cobia Permitted Acquisition or a Cobia Permitted Investment may so merge or consolidate and (y) any Cobia Entity may merge into or consolidate with any other Person in a transaction in which the surviving entity is a Guarantor.

Section 8.7 Change in Nature of Business

The Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, engage in any business other than the Eligible Line of Business.

Section 8.8 Transactions with Affiliates

The Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, enter into any transaction of any kind with any Affiliate of the Borrower, whether or not in the ordinary course of business, other than on fair and reasonable terms substantially as favorable to the Borrower or such Restricted Subsidiary as would be obtainable by the Borrower or such Restricted Subsidiary at the time in a comparable arm’s length transaction with a Person other than an Affiliate except (a) transactions among the Borrower and its Restricted Subsidiaries, (b) Restricted Payments and Cobia Permitted Asset Sales otherwise permitted by this Agreement, (c) the payment of the operating expenses and capital expenditures of a Subsidiary of the Borrower, so long as such payment is in the ordinary course of business and consistent with past business practices with respect to such Subsidiary prior to the date hereof, (d) as contemplated by the Spin Steps and (e) transactions in accordance with the Affiliate Agreements.

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Section 8.9 Restrictions on Subsidiary Distributions; No New Negative Pledge

Other than (a) pursuant to the Loan Documents, (b) pursuant to any secured Indebtedness or Capital Lease Obligations permitted by Section 8.1(b), (d) or (e) (Indebtedness) so long as any prohibition or limitation is only effective against the assets securing such Indebtedness or (c) with respect to Performance Guarantee Collateral, in connection with any Performance Guarantee issued by a Person that is not an Affiliate, the Borrower shall not, and shall not permit any Restricted Subsidiaries to, (i) except as in effect on the date hereof and other than for Joint Ventures and Subsidiaries that are not Guarantors, agree to enter into or suffer to exist or become effective any consensual encumbrance or consensual restriction of any kind on the ability of such Subsidiary to pay dividends or make any other distribution or transfer of funds or assets or make loans or advances to or other Investments in, or pay any Indebtedness owed to, the Borrower or any other Restricted Subsidiary of the Borrower or (ii) other than customary non-assignment provisions in contracts entered into in the ordinary course of business, enter into or permit to exist or become effective any enforceable agreement prohibiting or limiting the ability of the Borrower or any Restricted Subsidiary to create, incur, assume or permit to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, to secure the Obligations, including any agreement requiring any other Indebtedness or Contractual Obligation to be equally and ratably secured with the Obligations.

Section 8.10 Modification of Constituent Documents

The Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, change its capital structure (including the terms of its outstanding Stock) or otherwise amend its Constituent Documents except (a) as contemplated by the Spin Steps and (b) other changes and amendments that do not materially and adversely affect the rights and privileges of the Borrower or any of its Subsidiaries and do not materially and adversely affect the interests of the Secured Parties under the Loan Documents or the rights and interests of any of them in the Collateral.

Section 8.11 Accounting Changes; Fiscal Year

The Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, (a) make any material change in its accounting treatment and reporting practices or tax reporting treatment, except as required by GAAP or any Requirement of Law and disclosed to the Lenders and the Administrative Agent or (b) change its Fiscal Year.

Section 8.12 Margin Regulations

The Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, use all or any portion of the proceeds of any credit extended hereunder to purchase or carry margin stock (within the meaning of Regulation U of the Federal Reserve Board) in contravention of Regulation U of the Federal Reserve Board.

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Section 8.13 Sale/Leasebacks

The Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, enter into any sale and leaseback transaction unless (a) the proceeds of such transaction received by the Loan Parties equal the Fair Market Value of the properties subject to such transaction and (b) after giving effect to such sale and leaseback transaction, the aggregate Fair Market Value of all properties covered at any one time by all sale and leaseback transactions permitted hereunder (other than any sale and leaseback transaction of property entered into within 90 days of the acquisition of such property from a Person other than the Borrower or any Affiliate thereof) does not exceed $100,000,000.00.

Section 8.14 Capital Expenditures

The Borrower shall not make or incur, or permit its Restricted Subsidiaries to make or incur, Capital Expenditures during any Fiscal Year in excess of an amount equal to:

(a) $400,000,000.00 minus

(b) the sum of (i) the amount of Restricted Payments made in such Fiscal Year pursuant to Section 8.5(e) (Restricted Payments) and (ii) the amount of Investments made in such Fiscal Year pursuant to Section 8.5(m) (Restricted Payments) plus

(c) beginning in Fiscal Year 2011, the lesser of (i) the amount by which Capital Expenditures for the prior Fiscal Year were less than the result of clauses (a) and (b) above for such prior Fiscal Year and (ii) $200,000,000.00.

Section 8.15 Cancellation of Indebtedness Owed to It

The Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, cancel any material claim or Indebtedness owed to any of them except (a) in the ordinary course of business, (b) if such Indebtedness is owed by a Guarantor to a Loan Party, and such Indebtedness is either (i) cancelled in exchange for Stock of such Guarantor, (ii) converted into Stock of such Guarantor or (iii) converted such that it increases the paid-in-capital of such Loan Party in such Guarantor, or (c) as contemplated by the Spin Steps.

Section 8.16 No Speculative Transactions

The Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, engage in any material speculative transaction or in any material transaction involving the entry into of Hedging Contracts by such Person except for the sole purpose of hedging in the ordinary course of business.

Section 8.17 Post-Termination Benefits

Except to the extent required under Section 4980B of the Code or similar state laws or as contemplated by the Spin Steps, the Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, without the consent of the Requisite Lenders, adopt

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any Employee Benefit Plan that provides health or welfare benefits (through the purchase of insurance or otherwise) to any retired or former employees, consultants or directors (or their dependents) of the Borrower or any of its Subsidiaries.

Section 8.18 Activities in Panama

The Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, invest the proceeds of any Loan in any activity within the territory of the Republic of Panama if such activity will (i) generate taxable income under Panamanian tax laws that will have to be paid by the Borrower or any of its Subsidiaries to a Panamanian Governmental Authority; or (ii) cause any payment to a Lender or the Administrative Agent to be subject to Panamanian tax, including withholding tax.

Section 8.19 Terms of Spin

The Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, undertake the Spin unless (a) the Spin is undertaken as contemplated by the Spin Steps, (b) no Default or Event of Default exists at the time of, or after giving effect to, the completion of all such transactions, (c) the Borrower is in pro forma compliance with the covenants set forth in Article V (Financial Covenants) as of the last day of the most recently completed four Fiscal Quarter period for which the financial statements and certificates required by Section 6.1(a) (Quarterly Reports) or (b) (Annual Reports) have been delivered, (d) the New Borrower assumes the obligations as the “Borrower” hereunder substantially simultaneously therewith as contemplated by Section 11.21 (Assumption of New Borrower), (e) the Administrative Agent has consented to the terms of each of the Affiliate Agreements and each other material agreement between or among the New Borrower and its Subsidiaries (or any of them), on the one hand, and the Babcock Entities (or any of them), on the other hand, to be, or remain, in effect after the Spin, including any other shared services, intercompany debt and separation agreements (which consent shall not be unreasonably withheld, conditioned or delayed, but may, in the Administrative Agent’s sole discretion, be made in conjunction with a reasonably prompt consultation with the Lenders with respect thereto, with any such consultation with the Lenders not to require approval of more than the Requisite Lenders and not to be unreasonably withheld, conditioned or delayed), and (f) after giving effect thereto, the statement in Section 3.2(b)(i) will be true.

Section 8.20 Vessel Flags

The Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, change the flag under which any Mortgaged Vessel is registered unless (i) the Borrower shall have provided at least 10 Business Days’ (or such shorter period permitted by the Administrative Agent in its sole discretion) advance notice to the Administrative Agent, (ii) the flag under which such Mortgaged Vessel is to be registered is listed on Schedule 8.20 (Permitted Flags) or is otherwise acceptable to the Administrative Agent in its sole discretion and (iii) the Borrower otherwise complies with the requirements contained in the Mortgage applicable to the Mortgaged Vessel in question with respect to changing the flag of a Mortgaged Vessel.

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Section 8.21 Existing Babcock Guaranties

Except for the Existing Babcock Guaranties, neither the New Borrower nor the Borrower or any of its Subsidiaries shall have any Guaranty Obligations in respect of the obligations of any of the Babcock Entities.

ARTICLE IX

EVENTS OF DEFAULT

Section 9.1 Events of Default

Each of the following events shall be an Event of Default:

(a) the Borrower shall fail to pay any principal of any Loan or any Reimbursement Obligation when the same becomes due and payable; or

(b) the Borrower shall fail to pay any interest on any Loan, any fee under any of the Loan Documents or any other Obligation (other than one referred to in clause (a) above) and such non-payment continues for a period of three Business Days after the due date therefor; or

(c) any representation or warranty made or deemed made by any Loan Party in any Loan Document shall prove to have been incorrect in any material respect when made or deemed made; or

(d) any Loan Party shall fail to perform or observe (i) any term, covenant or agreement contained in Article V (Financial Covenants), Section 6.3 (Default Notices), Section 7.1 (Preservation of Corporate Existence, Etc.), Section 7.6 (Access) or Article VIII (Negative Covenants) or (ii) any other term, covenant or agreement contained in this Agreement or in any other Loan Document if such failure under this clause (ii) shall remain unremedied for 30 days after the earlier of (A) the date on which a Responsible Officer of the Borrower obtains actual knowledge of such failure and (B) the date on which written notice thereof shall have been given to the Borrower by the Administrative Agent or any Lender; or

(e) (i) the Borrower or any of its Material Subsidiaries shall fail to make any payment on any recourse Indebtedness of the Borrower or any such Material Subsidiary (other than the Obligations) or any Guaranty Obligation in respect of Indebtedness of any other Person, and, in each case, such failure relates to Indebtedness having a principal amount of $10,000,000.00 or more when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), (ii) any other event shall occur or condition shall exist under any agreement or instrument relating to any such Indebtedness, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such Indebtedness or (iii) any such Indebtedness shall become or be declared to be due and payable, or required to be prepaid or repurchased (other than by a regularly scheduled required prepayment), prior to the stated maturity thereof; provided that clauses (ii) and (iii) above

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shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness; or

(f) (i) the Borrower or any of its Material Subsidiaries shall generally not pay its debts as such debts become due, shall admit in writing its inability to pay its debts generally or shall make a general assignment for the benefit of creditors, (ii) any proceeding shall be instituted by or against the Borrower or any of its Material Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts, under any Requirement of Law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a custodian, receiver, trustee or other similar official for it or for any substantial part of its property; provided, however, that, in the case of any such proceedings instituted against the Borrower or any of its Material Subsidiaries (but not instituted by the Borrower or any of its Subsidiaries), either such proceedings shall remain undismissed or unstayed for a period of 60 days or more or an order or decree approving or ordering any of the foregoing shall be entered, or (iii) the Borrower or any of its Material Subsidiaries shall take any corporate action to authorize any action set forth in clauses (i) or (ii) above; or

(g) one or more judgments, injunctions or orders (or other similar process) involving, in the case of a money judgment, an amount in excess of $10,000,000.00 in the aggregate (to the extent not covered by insurance as to which a solvent and unaffiliated insurance company has acknowledged coverage), shall be rendered against one or more of the Borrower and its Material Subsidiaries and shall remain unpaid and either (x) enforcement proceedings shall have been commenced by any creditor upon such judgment, injunction or order or (y) there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment, injunction or order, by reason of a pending appeal or otherwise, shall not be in effect; or

(h) (i) one or more ERISA Events shall occur and the amount of all liabilities and deficiencies resulting therefrom imposed on or which could reasonably be expected to be imposed directly on the Borrower, any of its Subsidiaries or any Guarantor, whether or not assessed, when taken together with amounts of all such liabilities and deficiencies for all other such ERISA Events exceeds $20,000,000.00 in the aggregate, or (ii) there exists any fact or circumstance that reasonably could be expected to result in the imposition of a Lien or security interest under Section 430 of the Code or under ERISA; or

(i) any provision of any Collateral Document or any other Loan Document shall for any reason, except as permitted by the Loan Documents, cease to be valid and binding on, or enforceable against, any Loan Party which is a party thereto, or any Loan Party shall so state in writing; or

(j) any Collateral Document shall for any reason fail or cease to create a valid Lien on any Collateral with an aggregate value of $15,000,000.00 or more purported to be covered thereby or, except as permitted by the Loan Documents, such

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Lien shall fail or cease to be a perfected and first priority Lien or any Loan Party shall so state in writing;

(k) there shall occur any Change of Control; or

(l) the New Borrower or the Borrower or any of its Subsidiaries shall make payment or perform obligations under or in respect of the Existing Babcock Guaranties listed as item 11 on the attached Schedule 8.8 having an aggregate value for all such payments and performance on and after the Effective Date in excess of $15,000,000.00.

Section 9.2 Remedies

During the continuance of any Event of Default, the Administrative Agent (a) may, and, at the request of the Requisite Lenders, shall, by notice to the Borrower declare that all or any portion of the Revolving Commitments be terminated, whereupon the obligation of each Lender to make any Loan and each Issuer to Issue any Letter of Credit shall immediately terminate and (b) may and, at the request of the Requisite Lenders, shall, by notice to the Borrower, declare the Loans, all interest thereon and all other amounts and Obligations payable under this Agreement to be forthwith due and payable, whereupon the Loans, all such interest and all such amounts and Obligations shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrower; provided, however, that upon the occurrence of any Event of Default specified in Section 9.1(f) (Events of Default) with respect to the Borrower, (x) the Revolving Commitments of each Lender to make Loans and the commitments of each Lender and Issuer to Issue or participate in Letters of Credit shall each automatically be terminated and (y) the Loans, all such interest and all such amounts and Obligations shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by the Borrower. In addition to the remedies set forth above, the Administrative Agent and the Collateral Agent may exercise any remedies provided for by the Collateral Documents in accordance with the terms thereof or any other remedies provided by applicable law.

Section 9.3 Actions in Respect of Letters of Credit

Upon the Revolving Facility Termination Date, the Borrower shall pay to the Administrative Agent in immediately available funds at the Administrative Agent’s office referred to in Section 11.8 (Notices, Etc.), for deposit in the Cash Collateral Account in accordance with Section 2.19(b) (Cash Collateral), an amount equal to 105% of the sum of all outstanding Letter of Credit Obligations. The Administrative Agent may, from time to time after funds are deposited in any Cash Collateral Account with respect to Letters of Credit (and while an Event of Default has occurred and is continuing or after the acceleration of the Loans), apply funds then held in such Cash Collateral Account to the payment of any amounts as shall have become or shall become due and payable by the Borrower to the Issuers or Lenders in respect of the Letter of Credit Obligations. The Administrative Agent shall promptly give written notice of any such application;

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provided, however, that the failure to give such written notice shall not invalidate any such application.

ARTICLE X

THE ADMINISTRATIVE AGENT AND OTHER AGENTS

Section 10.1 Authorization and Action

(a) Appointment and Authority. Each of the Lenders and each Issuer hereby irrevocably appoints CA CIB (i) to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto and (ii) to act on behalf of each Lender, each Issuer and the other Secured Parties as the Collateral Agent hereunder and under the Collateral Documents and authorizes the Collateral Agent to take such actions on its behalf and to exercise such powers as are delegated to the Collateral Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article X (The Administrative Agent and Other Agents) are solely for the benefit of the Administrative Agent, the Collateral Agent the Lenders and the Issuer, and neither the Borrower nor any other Loan Party shall have rights as a third party beneficiary of any of such provisions or any obligations with respect thereto.

(b) Exculpatory Provisions. Neither the Administrative Agent nor the Collateral Agent shall have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, neither the Administrative Agent nor the Collateral Agent: (i) shall be subject to any fiduciary or other implied duties, regardless of whether a Default or an Event of Default has occurred and is continuing; (ii) shall have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent or the Collateral Agent, as applicable, is required to exercise as directed in writing by the Requisite Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that neither the Administrative Agent nor the Collateral Agent shall be required to take any action that, in its opinion or the opinion of its counsel, may expose such Agent to liability or that is contrary to any Loan Document or applicable law; and (iii) shall, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, nor shall be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent, the Collateral Agent or any Affiliates of the foregoing in any capacity.

Neither the Administrative Agent nor the Collateral Agent shall be liable for any action taken or not taken by it (A) with the consent or at the request of the Requisite Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the

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Administrative Agent or the Collateral Agent, as applicable, shall believe in good faith shall be necessary, under the circumstances as provided in Sections 11.1 (Amendments, Waivers, Etc.) and 9.2 (Remedies) or (B) in the absence of its own gross negligence or willful misconduct. The Administrative Agent and the Collateral Agent shall be deemed not to have knowledge of any Default or Event of Default unless and until notice describing such Default or Event of Default is given to the Administrative Agent or the Collateral Agent, as applicable, by the Borrower, a Lender or an Issuer.

Neither the Administrative Agent nor the Collateral Agent shall be responsible for or have any duty to ascertain or inquire into (u) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (v) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (w) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (x) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the Collateral Documents, (y) the value or the sufficiency of any Collateral, or (z) the satisfaction of any condition set forth in Article III (Conditions to Loans and Letters of Credit) or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent or the Collateral Agent, as applicable.

(c) Delegation of Duties. The Administrative Agent and the Collateral Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub agents appointed by the Administrative Agent or the Collateral Agent, as applicable. The Administrative Agent, the Collateral Agent and any such sub agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub agent and to the Related Parties of the Administrative Agent, the Collateral Agent and any such sub agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent or Collateral Agent, as applicable.

Section 10.2 Administrative Agent’s Reliance, Etc.

The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the Issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the Issuer, the Administrative Agent may presume that such condition is satisfactory to such Lender or the Issuer unless the Administrative Agent shall have

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received notice to the contrary from such Lender or the Issuer prior to the making of such Loan or the Issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower or any other Loan Party), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

Section 10.3 The Agents Individually

The Person serving as each Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not such Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Persons serving as the Agents hereunder in such Person’s individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not an Agent hereunder and without any duty to account therefor to the Lenders.

Section 10.4 Lender Credit Decision

Each Lender and each Issuer acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and each Issuer also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

Section 10.5 Indemnification

(a) Each Lender agrees to indemnify the Administrative Agent, the Collateral Agent and each Issuer and each of their respective Affiliates, and each of their respective Related Parties (to the extent not reimbursed by the Borrower), from and against such Lender’s aggregate Ratable Portion (determined at the time such indemnity is made) of any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and disbursements (including fees, expenses and disbursements of financial and legal advisors) of any kind or nature whatsoever that may be imposed on, incurred by, or asserted against, the Administrative Agent, the Collateral Agent or such Issuer or any of their respective Related Parties in any way relating to or arising out of this Agreement or the other Loan Documents or any action taken or omitted by the Administrative Agent, the Collateral Agent, or such Issuer under this Agreement or the other Loan Documents; provided, however, that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments,

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suits, costs, expenses or disbursements resulting from the Administrative Agent’s, Collateral Agent’s or such Issuer’s or such Related Party’s gross negligence or willful misconduct. Without limiting the foregoing, each Lender agrees to reimburse the Administrative Agent, the Collateral Agent, or each Issuer as applicable, promptly upon demand for its ratable share (determined at the time such reimbursement is made) of any out-of-pocket expenses (including fees, expenses and disbursements of financial and legal advisors) incurred by the Administrative Agent, the Collateral Agent, or such Issuer as applicable, in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of its rights or responsibilities under, this Agreement or the other Loan Documents, to the extent that the Administrative Agent, the Collateral Agent, or such Issuer, as applicable, is not reimbursed for such expenses by the Borrower or any other Loan Party.

(b) To the extent required by any applicable law, the Administrative Agent may withhold from any payment to any Lender an amount equivalent to any applicable withholding tax. If the Internal Revenue Service or any other Governmental Authority asserts a claim that the Administrative Agent did not properly withhold tax from amounts paid to or for the account of any Lender because the appropriate form was not delivered or was not properly executed or because such Lender failed to notify the Administrative Agent of a change in circumstances which rendered the exemption from or reduction of withholding tax ineffective or for any other reason, such Lender shall indemnify the Administrative Agent fully for all amounts paid, directly or indirectly, by the Administrative Agent as tax or otherwise, including any penalties or interest and together with any all expenses incurred.

Section 10.6 Successor Agents

(a) The Administrative Agent may at any time give notice of its resignation to the Lenders, the Issuers and the Borrower. Upon receipt of any such notice of resignation, the Requisite Lenders shall have the right, in consultation with the Borrower, to appoint a successor, which shall be a bank with an office in the United States of America, or an Affiliate of any such bank with an office in the United States of America. If no successor shall have been so appointed by the Requisite Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders and the Issuers, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders or the Issuer under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (2) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and each

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Issuer directly, until such time as the Requisite Lenders appoint a successor Administrative Agent as provided for above in this paragraph. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this paragraph). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article X (The Administrative Agent and Other Agents) and Sections 11.3 (Costs and Expenses) and 11.4 (Indemnities) shall continue in effect for the benefit of such retiring Administrative Agent, its sub agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

(b) The Collateral Agent may at any time give notice of its resignation to the Lenders, the Issuers and the Borrower. Upon receipt of any such notice of resignation, the Requisite Lenders shall have the right, in consultation with the Borrower, to appoint a successor, which shall be a bank with an office in the United States of America, or an Affiliate of any such bank with an office in the United States of America. If no successor shall have been so appointed by the Requisite Lenders and shall have accepted such appointment within 30 days after the retiring Collateral Agent gives notice of its resignation, then the retiring Collateral Agent may on behalf of the Lenders and the Issuers, appoint a successor Collateral Agent meeting the qualifications set forth above; provided that if the Collateral Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) the retiring Collateral Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Collateral Agent on behalf of the Lenders or the Issuer under any of the Loan Documents, the retiring Collateral Agent shall continue to hold such collateral security until such time as a successor Collateral Agent is appointed) and (2) all payments, communications and determinations provided to be made by, to or through the Collateral Agent shall instead be made by or to each Lender and each Issuer directly, until such time as the Requisite Lenders appoint a successor Collateral Agent as provided for above in this paragraph. Upon the acceptance of a successor’s appointment as Collateral Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Collateral Agent, and the retiring Collateral Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this paragraph). The fees payable by the Borrower to a successor Collateral Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring Collateral Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article X (The Administrative Agent and Other Agents) and Sections 11.3 (Costs and Expenses) and 11.4 (Indemnities)

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shall continue in effect for the benefit of such retiring Collateral Agent, its sub agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Collateral Agent was acting as Collateral Agent.

Section 10.7 Concerning the Collateral and the Collateral Documents

(a) Each Lender and each Issuer agrees that any action taken by the Administrative Agent, the Collateral Agent or the Requisite Lenders (or, where required by the express terms of this Agreement, a different proportion of the Lenders) in accordance with the provisions of this Agreement or the other Loan Documents, and the exercise by the Administrative Agent, the Collateral Agent or the Requisite Lenders (or, where so required, such other proportion) of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be deemed authorized by and shall be binding upon all of the Lenders, Issuers and other Secured Parties. Without limiting the generality of the foregoing, the Administrative Agent and the Collateral Agent, as applicable, shall have the sole and exclusive right and authority to (i) act as the disbursing and collecting agent for the Lenders and the Issuers with respect to all payments and collections arising in connection herewith and with the Collateral Documents, (ii) execute and deliver each Collateral Document and accept delivery of each such agreement delivered by the Borrower or any of its Subsidiaries, (iii) act as collateral agent for the Lenders, the Issuers and the other Secured Parties for purposes of the perfection of all security interests and Liens created by such agreements and all other purposes stated therein, (iv) manage, supervise and otherwise deal with the Collateral, (v) take such action as is necessary or desirable to maintain the perfection and priority of the security interests and Liens created or purported to be created by the Collateral Documents and (vi) except as may be otherwise specifically restricted by the terms hereof or of any other Loan Document, exercise all remedies given to the Administrative Agent, the Collateral Agent, the Lenders, the Issuers and the other Secured Parties with respect to the Collateral under the Loan Documents relating thereto, applicable law or otherwise.

(b) Each of the Lenders and the Issuers hereby directs, in accordance with the terms hereof, the Collateral Agent to release (or, in the case of clause (ii) below, release or subordinate) any Lien held by the Collateral Agent for the benefit of the Secured Parties against any of the following:

(i) all of the Collateral, upon termination of the Revolving Commitments and payment and satisfaction in full of all Loans, Reimbursement Obligations and all other Obligations that the Collateral Agent has been notified in writing are then due and payable (and, in respect of contingent Letter of Credit Obligations, with respect to which cash collateral has been deposited or a back-up letter of credit has been issued, in either case on terms reasonably satisfactory to the Administrative Agent and the applicable Issuers);

(ii) any assets that are subject to a Lien permitted by Section 8.2(b), (d)(ii) or (d)(iii) (Liens, Etc.) or any refinancings thereof permitted under Section 8.2(e) (Liens, Etc.);

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(iii) any Performance Guarantee Collateral;

(iv) if such sale or disposition is permitted by this Agreement (or permitted pursuant to a waiver or consent of a transaction otherwise prohibited by this Agreement), any Collateral sold or disposed of by a Loan Party and/or the guaranty of any Guarantor which has been voluntarily sold or disposed of by a Loan Party or otherwise ceases to be a Subsidiary of the Borrower as a result of a transaction permitted by this Agreement; and

(v) all of the Collateral, so long as (A) a Release Date has occurred, (B) no Default or Event of Default shall have occurred and be continuing, (C) a Spring-Back Date after such Release Date has not occurred, and (D) the Administrative Agent has received a certificate from the Borrower with respect to the foregoing.

Each of the Lenders and the Issuers hereby directs, in accordance with the terms hereof, the Administrative Agent to release any Guarantor from its obligations under the Pledge and Security Agreement if such release is permitted by Section 11.1(a)(viii) (Amendments, Waivers, Etc.). Each of the Lenders and the Issuers hereby directs the Collateral Agent to execute and deliver or file such termination and partial release statements and do such other things as are necessary to release Liens and guaranties to be released pursuant to this Section 10.7 promptly upon the effectiveness of any such release.

Section 10.8 Collateral Matters Relating to Related Obligations

The benefit of the Loan Documents and of the provisions of this Agreement relating to the Collateral shall extend to and be available in respect of any Obligation that is otherwise owed to Persons other than the Administrative Agent, the Collateral Agent, the Lenders and the Issuers (collectively, “Related Obligations”) solely on the condition and understanding, as among the Collateral Agent and all Secured Parties, that (a) the Related Obligations shall be entitled to the benefit of the Loan Documents and the Collateral to the extent expressly set forth in this Agreement and the other Loan Documents and to such extent the Collateral Agent shall hold, and have the right and power to act with respect to, the Collateral Documents and the Collateral on behalf of and as agent for the holders of the Related Obligations, but the Collateral Agent is otherwise acting solely as agent for the Lenders and the Issuers and shall have no fiduciary duty, duty of loyalty, duty of care, duty of disclosure or other obligation whatsoever to any holder of Related Obligations, (b) all matters, acts and omissions relating in any manner to the Collateral Documents, the Collateral, or the omission, creation, perfection, priority, abandonment or release of any Lien, shall be governed solely by the provisions of this Agreement and the other Loan Documents and no separate Lien, right, power or remedy shall arise or exist in favor of any Secured Party under any separate instrument or agreement or in respect of any Related Obligation, (c) each Secured Party shall be bound by all actions taken or omitted, in accordance with the provisions of this Agreement and the other Loan Documents, by the Administrative Agent, the Collateral Agent and the Requisite Lenders, each of whom shall be entitled to act at its sole discretion and

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exclusively in its own interest given its own Revolving Commitments and its own interest in the Loans, Letter of Credit Obligations and other Obligations to it arising under this Agreement or the other Loan Documents, without any duty or liability to any other Secured Party or as to any Related Obligation and without regard to whether any Related Obligation remains outstanding or is deprived of the benefit of the Collateral or becomes unsecured or is otherwise affected or put in jeopardy thereby, and (d) no holder of Related Obligations and no other Secured Party (except the Administrative Agent, the Collateral Agent, the Lenders and the Issuers, to the extent set forth in this Agreement) shall have any right to be notified of, or to direct, require or be heard with respect to, any action taken or omitted in respect of the Collateral or under this Agreement or the Loan Documents. Notwithstanding any other provision of any Loan Document to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Obligations arising under Treasury Management Agreements and Hedging Contracts unless the Administrative Agent has received written notice of such Obligations, together with such supporting documentation as the Administrative Agent may request, from the applicable Secured Party, as the case may be.

Section 10.9 Other Agents

Anything herein to the contrary notwithstanding, none of the Syndication Agent, the Co-Documentation Agents, the Joint Lead Arrangers or the Joint Bookrunners listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, the Collateral Agent, a Lender or an Issuer hereunder.

ARTICLE XI

MISCELLANEOUS

Section 11.1 Amendments, Waivers, Etc.

(a) No amendment or waiver of any provision of this Agreement or any other Loan Document nor consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be in writing and signed by the Requisite Lenders (or by the Administrative Agent with the consent of the Requisite Lenders) and, in the case of any amendment, by the Borrower, and then any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no amendment, waiver or consent shall, unless in writing and signed by each Lender directly affected thereby (or the Administrative Agent with the consent thereof), do any of the following:

(i) waive any condition specified in Section 3.1 (Conditions Precedent to Effectiveness) or 3.2(b) (Conditions Precedent to Each Loan and Letter of Credit), except with respect to a condition based upon another provision hereof, the waiver of which requires only the concurrence of the Requisite Lenders and, in the case of the conditions specified in Section 3.1 (Conditions

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Precedent to Effectiveness), subject to the provisions of Section 3.3 (Determinations of Initial Borrowing Conditions);

(ii) increase the Revolving Commitment of such Lender;

(iii) extend the scheduled final maturity of any Loan owing to such Lender or any Reimbursement Obligation, or waive, reduce or postpone any scheduled date fixed for the payment or reduction of principal of any such Loan or Reimbursement Obligation or for the reduction of such Lender’s Revolving Commitment;

(iv) reduce the principal amount of any Loan owing to such Lender or any Reimbursement Obligation (other than by the payment or prepayment thereof);

(v) reduce the rate or amount of interest on any Loan outstanding to such Lender or any Reimbursement Obligations outstanding or any fee payable hereunder to such Lender; provided, however, that only the consent of the Requisite Lenders shall be necessary to waive any obligation of the Borrower to pay interest or Letter of Credit Participation Fees at the default rate set forth in Section 2.10(c) (Default Interest) and Section 2.12(b)(ii) (Letter of Credit Fees), respectively;

(vi) postpone any scheduled date fixed for payment of such interest or fees owing to such Lender;

(vii) (x) alter the manner in which payments or prepayments of principal, interest or other amounts hereunder shall be applied as among the Lenders or (y) change the aggregate Ratable Portions of Lenders required for any or all Lenders to take any action hereunder;

(viii) release all or substantially all of the Collateral except as provided in Section 10.7(b) (Concerning the Collateral and the Collateral Documents) or release the Borrower from its payment obligation to such Lender under this Agreement or the Notes owing to such Lender (if any) or release any Guarantor from its obligations under the Pledge and Security Agreement except in connection with the sale or other disposition of a Guarantor (or all or substantially all of the assets thereof) permitted by this Agreement (or permitted pursuant to a waiver or consent of a transaction otherwise prohibited by this Agreement); provided, however, that notwithstanding the foregoing, any Immaterial Guarantor may be released with the consent of the Administrative Agent; or

(ix) amend Section 10.7(b) (Concerning the Collateral and the Collateral Documents), this Section 11.1, the sharing provisions of Section 11.7 (Sharing of Payments, Etc.) or either definition of the terms “Requisite Lenders” or “Ratable Portion”;

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and, provided, further, that (v) no amendment shall be made to this clause (a) without the prior written consent of each Lender, (w) no amendment, waiver or consent shall, unless in writing and signed by any Special Purpose Vehicle that has been granted an option pursuant to Section 11.2(g) (Assignments and Participations), affect the grant or nature of such option or the right or duties of such Special Purpose Vehicle hereunder, (x) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above to take such action, affect the rights or duties of the Administrative Agent under this Agreement or the other Loan Documents, (y) no amendment, waiver or consent shall, unless in writing and signed by such Issuer, affect the rights or duties of any Issuer under this Agreement or the other Loan Documents and (z) each Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with the consent of the Lenders other than Defaulting Lender), except that (x) the Revolving Commitments of any Defaulting Lender may not be increased or extended without the consent of such Lender and (y) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender more adversely than other affected Lenders shall require the consent of such Defaulting Lender.

(b) The Administrative Agent may, but shall have no obligation to, with the written concurrence of any Lender, execute amendments, modifications, waivers or consents on behalf of such Lender. Any waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given. No notice to or demand on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in similar or other circumstances.

(c) If, in connection with any proposed amendment, modification, waiver or termination (a “Proposed Change”) requiring the consent of all affected Lenders, the consent of Requisite Lenders is obtained but the consent of other Lenders whose consent is required is not obtained (any such Lender whose consent is not obtained as described in this Section 11.1(c) being referred to as a “Non-Consenting Lender”), then, at the Borrower’s request, the Administrative Agent or an Eligible Assignee acceptable to the Administrative Agent shall have the right (but shall have no obligation) to purchase from such Non-Consenting Lender, and such Non-Consenting Lender agrees that it shall, upon the Administrative Agent’s request, sell and assign to the Lender acting as the Administrative Agent or such Eligible Assignee, all of the Revolving Commitments and applicable Outstandings of such Non-Consenting Lender for an amount equal to the principal balance of all applicable Loans held by the Non-Consenting Lender and all accrued interest and fees with respect thereto and other amounts due and payable hereunder through the date of sale, such purchase and sale to be consummated pursuant to an Assignment and Acceptance, and the Assignee shall pay any processing and recordation fee (which fee may be waived or reduced in the sole discretion of the Administrative Agent); provided, however, that the failure to execute such Assignment and Acceptance by the Non-Consenting Lender shall not invalidate such assignment, and

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such Assignment and Acceptance shall be deemed to be executed upon receipt by such Non-Consenting Lender of the proceeds of such sale and acceptance.

Section 11.2 Assignments and Participations

(a) Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that, except as contemplated by the Spin and in accordance with Section 11.21 (Assumption of New Borrower), no Loan Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of clause (b) below, (ii) by way of participation in accordance with the provisions of clause (d) below or (iii) by way of pledge or assignment of a security interest subject to the restrictions of clause (f) below (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in clause (d) below and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b) Assignments by Lenders. Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Revolving Commitment and the Loans at the time owing to it); provided that any such assignment shall be subject to the following conditions:

(i) Minimum Amounts. (A) in the case of an assignment of the entire remaining amount of the assigning Lender’s Revolving Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and (B) in any case not described in clause (A) above, the aggregate amount of the Revolving Commitment (which for this purpose includes Loans outstanding thereunder) or, if the Revolving Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Acceptance, as of the Trade Date) shall not be less than $1,000,000.00 unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed).

(ii) Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights

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and obligations under this Agreement with respect to the Loan or the Revolving Commitment assigned.

(iii) Required Consents. No consent shall be required for any assignment except to the extent required by clause (b)(i)(B) above and, in addition: (A) the consent of the Borrower (such consent not to be unreasonably withheld) shall be required unless (x) an Event of Default has occurred and is continuing at the time of such assignment or (y) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within 5 Business Days after having received notice thereof; (B) the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments if such assignment is to a Person that is not a Lender with a Revolving Commitment, an Affiliate of such Lender or an Approved Fund with respect to such Lender; (C) the consent of each Issuer (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the assignee to participate in exposure under one or more Letters of Credit (whether or not then outstanding); and (D) the consent of the Swing Loan Lender (such consent not to be unreasonably withheld or delayed) shall be required for any assignment.

(iv) Assignment and Acceptance. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance, together with a processing and recordation fee of $3,500.00, and the assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

(v) No Assignment to Borrower. No such assignment shall be made to the Borrower or any of the Borrower’s Affiliates or Subsidiaries.

(vi) No Assignment to Natural Persons. No such assignment shall be made to a natural person.

(vii) No Assignment to Defaulting Lenders. No such assignment shall be made to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons.

(viii) Certain Additional Payments. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative

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Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent or any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit and Swing Loans in accordance with its Ratable Portion. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

Subject to acceptance and recording thereof by the Administrative Agent pursuant to clause (c) below, from and after the effective date specified in each Assignment and Acceptance, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 2.14 (Special Provisions Governing Eurodollar Rate Loans), 11.4 (Indemnities) and 11.5 (Limitation of Liability) with respect to facts and circumstances occurring prior to the effective date of such assignment. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with clause (d) below.

(c) Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at its address referred to in Section 11.8 (Notice, Etc.) a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Revolving Commitments of, and principal amounts of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. In addition, the Administrative Agent shall maintain on the Register information regarding the designation, and revocation of designation, of any Lender as a Defaulting Lender. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(d) Participations. Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural person, a Defaulting Lender or the Borrower or any of the

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Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Revolving Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent and the Lenders, Issuer and Swing Loan Lender shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver which would (x) reduce the amount, or postpone any date fixed for any amount (whether of principal, interest or fees) payable to such Participant under the Loan Documents, to which such Participant would otherwise be entitled under such participation, (y) increase the commitment applicable to such Participant or (z) result in the release of all or substantially all of the Collateral or releasing any Guarantor that is not an Immaterial Guarantor other than pursuant to an exception described in Section 11.1(a)(viii) (Amendments, Waivers, Etc.). Subject to clause (e) below, the Borrower agrees that each Participant shall be entitled to the benefits of Section 2.14 (Special Provisions Governing Eurodollar Rate Loans) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to clause (b) above. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.6 (Right of Set-off) as though it were a Lender, provided such Participant agrees to be subject to Section 11.7 (Sharing of Payments, Etc.) as though it were a Lender.

(e) Limitations upon Participant Rights. A Participant shall not be entitled to receive any greater payment under Sections 2.14(c) (Increased Costs), 2.15 (Capital Adequacy) and 4.8 (Taxes) than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.16 (Taxes) unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 2.16(e) and (f) (Taxes) as though it were a Lender.

(f) Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank or any central bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

(g) In addition to the other assignment rights provided in this Section 11.2, each Lender may (i) grant to a Special Purpose Vehicle the option to make

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all or any part of any Loan that such Lender would otherwise be required to make hereunder and the exercise of such option by any such Special Purpose Vehicle and the making of Loans pursuant thereto shall satisfy (once and to the extent that such Loans are made) the obligation of such Lender to make such Loans thereunder, provided, however, that nothing herein shall constitute a commitment or an offer to commit by such a Special Purpose Vehicle to make Loans hereunder and no such Special Purpose Vehicle shall be liable for any indemnity or other Obligation (other than the making of Loans for which such Special Purpose Vehicle shall have exercised an option, and then only in accordance with the relevant option agreement), and (ii) assign, as collateral or otherwise, any of its rights under this Agreement, whether now owned or hereafter acquired (including rights to payments of principal or interest on the Loans) to (y) any trustee for the benefit of the holders of such Lender’s Securities or any other holder of a Lender’s debt obligations or representative of such holder or (z) to any Special Purpose Vehicle to which such Lender has granted an option pursuant to clause (i) above, in each case without notice to or consent of the Borrower or the Administrative Agent; and provided, further, that no such assignment or grant shall release such Lender from any of its obligations hereunder except as expressly provided in clause (i) above. The parties hereto acknowledge and agree that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior debt of any such Special Purpose Vehicle, it will not institute against, or join any other Person in instituting against, any Special Purpose Vehicle that has been granted an option pursuant to this clause (g) any bankruptcy, reorganization, insolvency or liquidation proceeding (such agreement shall survive the payment in full of the Obligations).

(h) Any Issuer may, with, unless an Event of Default has occurred and is continuing, the prior written consent of the Borrower (such consent not to be unreasonably withheld or delayed) at any time assign its rights and obligations hereunder to any other Lender that is not a Defaulting Lender by an instrument in form and substance satisfactory to the Borrower, the Administrative Agent, such Issuer and such Lender. If any Issuer ceases to be a Lender hereunder by virtue of any assignment made pursuant to this Section 11.2(h), then, as of the effective date of such cessation, such Issuer’s obligations to Issue Letters of Credit pursuant to Section 2.4 (Letters of Credit) shall terminate and such Issuer shall be an Issuer hereunder only with respect to outstanding Letters of Credit issued prior to such date.

Section 11.3 Costs and Expenses

(a) The Borrower agrees upon demand to pay, or reimburse the Administrative Agent for all of the Administrative Agent’s reasonable external audit, appraisal, valuation, filing, document duplication and reproduction and investigation expenses and all of the Administrative Agent’s reasonable out-of-pocket legal expenses and for all other reasonable out-of-pocket costs and expenses of every type and nature (including, without limitation, the reasonable fees, expenses and disbursements of the Administrative Agent’s counsel, Bracewell & Giuliani LLP, local legal counsel, auditors, accountants, appraisers, printers, insurance and environmental advisors, and other consultants and agents) incurred by the Administrative Agent in connection with any of the following: (i) the Administrative Agent’s audit and investigation of the Borrower and

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its Subsidiaries in connection with the preparation, negotiation or execution of any Loan Document or, if an Event of Default has occurred and is continuing, the Administrative Agent’s periodic audits of the Borrower or any of its Subsidiaries (which audit expenses shall be reimbursed only if conducted when an Event of Default has occurred and is continuing), as the case may be, (ii) the preparation, negotiation, execution or interpretation of this Agreement (including, without limitation, the satisfaction or attempted satisfaction of any condition set forth in Article III (Conditions To Loans And Letters Of Credit), any Loan Document or any proposal letter or engagement letter issued in connection therewith, or the making of the Loans hereunder, (iii) the creation, perfection or protection of the Liens under any Loan Document (including any reasonable fees, disbursements and expenses for local counsel in various jurisdictions), (iv) the ongoing administration of this Agreement and the Loans and Letters of Credit, including consultation with attorneys in connection therewith and with respect to the Administrative Agent’s and the Collateral Agent’s rights and responsibilities hereunder and under the other Loan Documents, (v) the protection, collection or enforcement of any Obligation or the enforcement of any Loan Document, (vi) the commencement, defense or intervention in any court proceeding relating in any way to the Obligations, any Loan Party, any of the Borrower’s Subsidiaries, this Agreement or any other Loan Document, (vii) the response to, and preparation for, any subpoena or request for document production with which any Agent is served or deposition or other proceeding in which any Agent is called to testify, in each case, relating in any way to the Obligations, any Loan Party, any of the Borrower’s Subsidiaries, this Agreement or any other Loan Document or (viii) any amendment, consent, waiver, assignment, restatement, or supplement to any Loan Document or the preparation, negotiation, and execution of the same; provided, however, that the Borrower shall not have any obligation under clauses (vi) and (vii) hereunder in connection with any action brought by one Secured Party against another Secured Party (except in its capacity as an Agent, if applicable). The Borrower also agrees upon demand to pay all reasonable out-of-pocket expenses incurred by an Issuer in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder.

(b) The Borrower further agrees to pay or reimburse each Agent and each of the Lenders and Issuers upon demand for all reasonable out-of-pocket costs and expenses, including, without limitation, reasonable attorneys’ fees (including allocated costs of internal counsel and costs of settlement), incurred by such Agent, such Lenders or Issuers in connection with any of the following: (i) in enforcing any Loan Document or any security therefor or exercising or enforcing any other right or remedy available by reason of an Event of Default, (ii) in connection with any refinancing or restructuring of the credit arrangements provided hereunder in the nature of a “work-out” or in any insolvency or bankruptcy proceeding, (iii) in commencing, defending or intervening in any litigation or in filing a petition, complaint, answer, motion or other pleadings in any legal proceeding relating to the Obligations, any Loan Party, any of the Borrower’s Subsidiaries and related to or arising out of the transactions contemplated hereby or by any other Loan Document or (iv) in taking any other action in or with respect to any suit or proceeding (bankruptcy or otherwise) described in clause (i), (ii) or (iii) above; provided, however, that the Borrower shall not have any obligation under clause (iii)

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hereunder in connection with any action brought by one Secured Party against another Secured Party (except in its capacity as an Agent, if applicable).

(c) Without prejudice to the survival of any other agreement of the Borrower hereunder, the agreements and obligations of the Borrower contained in this Section 11.3 shall survive the resignation and/or replacement of the Administrative Agent, any assignment of rights by, or the replacement of, a Lender, the termination of the Revolving Commitments and the repayment, and the satisfaction or discharge of the Obligations.

Section 11.4 Indemnities

(a) The Borrower agrees to indemnify and hold harmless each Joint Lead Arranger, each Joint Bookrunner, each Agent, each Lender and each Issuer and each of their respective Related Parties (including those retained in connection with the satisfaction or attempted satisfaction of any condition set forth in Article III (Conditions To Loans And Letters Of Credit)) and each of their respective successors and assigns (each such Person being an “Indemnitee”) from and against any and all claims, damages, liabilities, obligations, losses, penalties, actions, judgments, suits, costs, disbursements and expenses of any kind or nature (including reasonable and customary fees, disbursements and expenses of financial and legal advisors to any such Indemnitee) that may be imposed on, incurred by or asserted against any such Indemnitee in connection with or arising out of any investigation, litigation or proceeding, whether or not any such Indemnitee is a party thereto and regardless of whether such matter is initiated by a third party or by the Borrower or any of its Affiliates, whether direct, indirect, or consequential and whether based on any federal, state or local law or other statutory regulation, securities or commercial law or regulation, or under common law or in equity, or on contract, tort or otherwise, in any manner relating to or arising out of this Agreement, any other Loan Document, any Obligation, any Letter of Credit or any act, event or transaction related or attendant to any thereof, or the use or intended use of the proceeds of the Loans or Letters of Credit or in connection with any investigation of any potential matter covered hereby (collectively, the “Indemnified Matters”); provided, however, that the Borrower shall not have any obligation under this Section 11.4 to an Indemnitee with respect to (i) any Indemnified Matter caused by or resulting from the gross negligence or willful misconduct of that Indemnitee, as determined by a court of competent jurisdiction in a final non-appealable judgment or order or order of an arbitral tribunal and (ii) any action brought by one Secured Party against another Secured Party (except in its capacity as an Agent, if applicable). Without limiting the foregoing, “Indemnified Matters” include (i) all Environmental Liabilities and Costs arising from or connected with the past, present or future operations of the Borrower or any of its Subsidiaries involving any property subject to a Collateral Document, or damage to real or personal property or natural resources or harm or injury alleged to have resulted from any Release of Contaminants on, upon or into such property or any contiguous real estate, (ii) any costs or liabilities incurred in connection with any Remedial Action concerning any Borrower or any of its Subsidiaries, (iii) any costs or liabilities incurred in connection with any Environmental Lien and (iv) any costs or liabilities incurred in connection with any other matter under any Environmental Law, including the Comprehensive Environmental

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Response, Compensation and Liability Act of 1980, (49 U.S.C. § 9601 et seq.) and applicable state property transfer laws, whether, with respect to any such matter, such Indemnitee is a mortgagee pursuant to any leasehold mortgage, a mortgagee in possession, the successor in interest to the Borrower or any of its Subsidiaries, or the owner, lessee or operator of any property of the Borrower or any of its Subsidiaries by virtue of foreclosure, except, with respect to those matters referred to in clauses (i), (ii), (iii) and (iv) above, to the extent (x) incurred following foreclosure (or deed in lieu thereof) by the Administrative Agent, any Lender or any Issuer, or the Administrative Agent, any Lender or any Issuer having become the successor in interest to the Borrower or any of its Subsidiaries and (y) attributable solely to acts of the Administrative Agent, such Lender or such Issuer or any agent on behalf of the Administrative Agent, such Lender or such Issuer.

(b) The Borrower shall indemnify each Agent, each Lender and each Issuer for, and hold each Agent, each Lender and each Issuer harmless from and against, any and all claims for brokerage commissions, fees and other compensation made against any Agent, any Lender and any Issuer for any broker, finder or consultant with respect to any agreement, arrangement or understanding made by or on behalf of any Loan Party or any of its Subsidiaries in connection with the transactions contemplated by this Agreement.

(c) Promptly after receipt by an Indemnitee of service of any complaint or the commencement of any action or proceeding with respect to an Indemnified Matter, such Indemnitee will notify the Borrower in writing of such complaint or of the commencement of such action or proceeding, but failure to so notify the Borrower will relieve the Borrower from the obligation to indemnify such Indemnitee only if and only to the extent that such failure results in the forfeiture by the Borrower of substantial rights and defenses that actually and materially prejudice the Borrower, and will not in any event relieve the Borrower from any other obligation or liability that the Borrower may have to any Indemnitee otherwise than in accordance with the provisions hereof. If the Borrower so elects following its acknowledgment of its obligation to indemnify the Indemnitee or is requested by such Indemnitee, the Borrower will assume the defense of such action or proceeding, including the employment of counsel reasonably satisfactory to such Indemnitee and the payment of the fees and disbursements of such counsel. In the event, however, such Indemnitee reasonably determines in its judgment that having common counsel would present such counsel with a conflict of interest or if the defendants in or targets of any such action or proceeding include both an Indemnitee and the Borrower and such Indemnitee reasonably concludes that there may be legal defenses available to it or other Indemnitees that are different from or in addition to those available to the Borrower, or if the Borrower fails to assume the defense of the action or proceeding or to employ counsel reasonably satisfactory to such Indemnitee in a timely manner, then such Indemnitee may employ separate counsel to represent or defend it in any such action or proceeding and the Borrower will pay the reasonable and customary fees and disbursements of such counsel; provided, however, that the Borrower will not be required to pay the fees and disbursements of more than one separate counsel (in addition to local counsel) for such Indemnitee in any jurisdiction in any single action or proceeding. In any action or proceeding the defense of which the Borrower assumes,

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the Indemnitee will have the right to participate in such litigation and to retain its own counsel at such Indemnitee’s own expense.

(d) The Borrower agrees that any indemnification or other protection provided to any Indemnitee pursuant to this Agreement (including pursuant to this Section 11.4) or any other Loan Document shall (i) survive payment in full of the Obligations and (ii) inure to the benefit of any Person that was at any time an Indemnitee under this Agreement or any other Loan Document.

Section 11.5 Limitation of Liability

The Borrower agrees that no Indemnitee shall have any liability (whether direct or indirect, in contract, tort or otherwise) to any Loan Party or any of their respective Subsidiaries or any of their respective equity holders or creditors for or in connection with the transactions contemplated hereby and in the other Loan Documents, except for direct damages (as opposed to special, indirect, consequential or punitive damages (including, without limitation, any loss of profits, business or anticipated savings)) determined in a final non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnitee’s gross negligence or willful misconduct. The Borrower hereby waives, releases and agrees (for itself and on behalf of its Subsidiaries) not to sue upon any such claim for any special, indirect, consequential or punitive damages, whether or not accrued and whether or not known or suspected to exist in its favor.

Section 11.6 Right of Set-off

Upon the occurrence and during the continuance of any Event of Default, each Lender and each Affiliate of any of them is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender or any of their respective Affiliates to or for the credit or the account of the Borrower against any and all of the Obligations now or hereafter existing whether or not such Lender shall have made any demand under this Agreement or any other Loan Document and even though such Obligations may be unmatured. Each Lender agrees promptly to notify the Borrower after any such set-off and application made by such Lender or its respective Affiliates; provided, however, that the failure to give such notice shall not affect the validity of such set-off and application. In the event that any Defaulting Lender shall exercise any right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.20 (Defaulting Lenders) and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender under this Section 11.6 are in addition to the other rights and remedies (including other rights of set-off) that such Lender may have.

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Section 11.7 Sharing of Payments, Etc.

(a) (i) If any Lender obtains any payment (whether voluntary, involuntary, through the exercise of any right of set-off or otherwise) of the Loans owing to it, any interest thereon, fees in respect thereof or amounts due pursuant to Section 11.3 (Costs and Expenses) or 11.4 (Indemnities) (other than payments pursuant to Section 2.14 (Special Provisions Governing Eurodollar Rate Loans), 2.15 (Capital Adequacy) or 2.16 (Taxes)) in excess of its Ratable Portion of all payments of such Obligations obtained by all the Lenders, except as the result of a refinancing of the Revolving Commitments, such Lender (each, a “Purchasing Lender”) shall forthwith purchase from the other Lenders (each, a “Selling Lender”) such participations in their Loans or other Obligations as shall be necessary to cause such Purchasing Lender to share the excess payment ratably with each of them.

(ii) Except as expressly provided otherwise with respect to Swing Loans and Defaulting Lenders, each Borrowing, each payment or prepayment of principal of any Borrowing, each payment of interest on the Loans, each payment of the Revolving Commitment Fees, each reduction of the Revolving Commitments and each conversion of any Borrowing to or continuation of any Borrowing shall be allocated pro rata among the Lenders in accordance with their respective Revolving Commitments (or, if Revolving Commitments shall have expired or been terminated, in accordance with the respective principal amounts of their outstanding Loans). For purposes of determining the available Revolving Commitments of the Lenders at any time, each outstanding Swing Loan shall be deemed to have utilized the Revolving Commitments of the Lenders (including those Lenders which shall not have made Swing Loans) pro rata in accordance with such respective Revolving Commitments. Each Lender agrees that in computing such Lender’s portion of any Borrowing to be made hereunder, the Administrative Agent may, in its discretion, round each Lender’s percentage of such Borrowing to the next higher or lower whole dollar amount.

(b) If all or any portion of any payment received by a Purchasing Lender is thereafter recovered from such Purchasing Lender, such purchase from each Selling Lender shall be rescinded and such Selling Lender shall repay to the Purchasing Lender the purchase price to the extent of such recovery together with an amount equal to such Selling Lender’s ratable share (according to the proportion of (i) the amount of such Selling Lender’s required repayment in relation to (ii) the total amount so recovered from the Purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered.

(c) The Borrower agrees that any Purchasing Lender so purchasing a participation from a Selling Lender pursuant to this Section 11.7 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Purchasing Lender were the direct creditor of the Borrower in the amount of such participation.

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Section 11.8 Notices, Etc.

All notices, demands, requests and other communications provided for in this Agreement shall be given in writing, or, if consented to by the Administrative Agent, by any telecommunication device capable of creating a written record (including electronic mail), and addressed to the party to be notified as follows:

(a) if to the Borrower:

J. RAY MCDERMOTT, S.A.

777 North Eldridge Parkway

Houston, Texas 77079

Attention: Treasurer

Telecopy No.: (281) ###-###-####

with a copy to:

McDermott International, Inc.

777 North Eldridge Parkway

Houston, Texas 77079

Attention: General Counsel

Telecopy No.: (281) ###-###-####

and

BAKER BOTTS L.L.P.

910 Louisiana Street

Houston, TX 77002

Attention: Ted Paris, Esq.

Telecopy No.: (713) 229-7738

E-Mail Address: ***@***

(b) if to any Lender, at its Domestic Lending Office;

(c) if to any Issuer, (i) at its Domestic Lending Office, if such Issuer is a Lender or (ii) otherwise, at the Domestic Lending Office of any Lender Affiliated therewith or, in each case at any other address set forth in a notice sent to the Administrative Agent and the Borrower; and

(d) if to the Administrative Agent:

CRÉDIT AGRICOLE CORPORATE

AND INVESTMENT BANK

1301 Avenue of the Americas

New York, NY 10019

Attention: Agnes Castillo

Telecopy No.: 917 ###-###-#### or ###-###-####

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or at such other address as shall be notified in writing (x) in the case of the Borrower and the Administrative Agent, to the other parties and (y) in the case of all other parties, to the Borrower and the Administrative Agent. All such notices and communications shall be effective upon personal delivery (if delivered by hand, including any overnight courier service), when deposited in the mails (if sent by mail), or when properly transmitted (if sent by a telecommunications device or through the Internet); provided, however, that notices and communications to the Administrative Agent pursuant to Article II (The Loans and Letters of Credit) or X (The Administrative Agent and Other Agents) shall not be effective until received by the Administrative Agent (unless otherwise expressly provided hereunder).

Section 11.9 No Waiver; Remedies

No failure on the part of any Lender, any Issuer or the Administrative Agent to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent and the Collateral Agent in accordance with Section 9.2 (Remedies) for the benefit of all the Secured Parties; provided, however, that the foregoing shall not prohibit (a) the Administrative Agent or the Collateral Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent or Collateral Agent) hereunder and under the other Loan Documents, (b) the Issuers from exercising the rights and remedies that inure to their respective benefit (solely in their capacity as Issuers) hereunder and under the other Loan Documents, (c) any Lender from exercising setoff rights in accordance with Section 11.6 (Right of Set-off) (subject to the terms of Section 11.7 (Sharing of Payments, Etc.), or (d) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under any Debtor Relief Law; and provided, further, that if at any time there is no Person acting as Administrative Agent or Collateral Agent hereunder and under the other Loan Documents, then (i) the Requisite Lenders shall have the rights otherwise ascribed to the Administrative Agent and the Collateral Agent pursuant to Section 9.2 (Remedies) and (ii) in addition to the matters set forth in clauses (b), (c) and (d) above and subject to Section 11.7 (Sharing of Payments, Etc.), any Lender may, with the consent of the Requisite Lenders, enforce any rights and remedies available to it and as authorized by the Requisite Lenders.

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Section 11.10 Binding Effect

This Agreement shall become effective when it shall have been executed by each of the parties hereto and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto.

Section 11.11 Governing Law

This Agreement and the rights and obligations of the parties hereto shall be governed by, and construed and interpreted in accordance with, the law of the State of New York, without regard to its conflicts of laws provisions.

Section 11.12 Submission to Jurisdiction; Service of Process

(a) Any legal action or proceeding with respect to this Agreement or any other Loan Document may be brought in the courts of the State of New York sitting in New York County or of the United States of America for the Southern District of New York, and, by execution and delivery of this Agreement, each party hereto hereby accepts for itself and in respect of its property, generally and unconditionally, the exclusive jurisdiction of the aforesaid courts, except that the Agents, Issuers or Lenders may bring legal action or proceedings in other appropriate jurisdictions with respect to the enforcement of its rights with respect to the Collateral. The parties hereto hereby irrevocably waive any objection, including any objection to the laying of venue or based on the grounds of forum non conveniens, that any of them may now or hereafter have to the bringing of any such action or proceeding in such respective jurisdictions.

(b) The Borrower irrevocably consents to the service of any and all process in any such action or proceeding by the mailing (by registered or certified mail, postage prepaid) of copies of such process to J. Ray McDermott Holdings, LLC (at 777 North Eldridge Parkway, Houston, Texas 77079) or the Borrower at its address specified in Section 11.8 (Notices, Etc.). The Borrower agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

(c) Nothing contained in this Section 11.12 shall affect the right of the Administrative Agent or any Lender to serve process in any other manner permitted by law or commence legal proceedings or otherwise proceed against the Borrower or any other Loan Party in any other jurisdiction.

(d) To the extent that the Borrower has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether from service or notice, attachment prior to judgment, attachment in aid of execution of a judgment, execution or otherwise), the Borrower hereby irrevocably waives such immunity in respect of its obligations hereunder.

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Section 11.13 Waiver of Jury Trial

EACH AGENT AND EACH OF THE LENDERS, THE ISSUERS AND THE BORROWER WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.

Section 11.14 Marshaling; Payments Set Aside

None of the Administrative Agent, any Lender or any Issuer shall be under any obligation to marshal any assets in favor of the Borrower or any other party or against or in payment of any or all of the Obligations. To the extent that the Borrower makes a payment or payments to the Administrative Agent, the Lenders or the Issuers or any such Person receives payment from the proceeds of the Collateral or exercises its rights of setoff, and such payment or payments or the proceeds of such enforcement or setoff or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party, then to the extent of such recovery, the obligation or part thereof originally intended to be satisfied, and all Liens, right and remedies therefor, shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

Section 11.15 Section Titles

The section titles contained in this Agreement are and shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto, except when used to reference such section. If a numbered reference to a clause, sub-clause or subsection hereof is immediately followed by a reference in parenthesis to the title of a section hereof containing such clause, sub-clause or subsection, the reference is only to such clause, sub-clause or subsection and not to the section generally. If a numbered reference to a section hereof is immediately followed by a reference in parenthesis to a section hereof, the title reference shall govern in case of direct conflict.

Section 11.16 Execution in Counterparts

This Agreement may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are attached to the same document. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or other electronic imaging means shall be effective as delivery of a manually executed counterpart hereof.

Section 11.17 Entire Agreement

This Agreement, together with all of the other Loan Documents and all certificates and documents delivered hereunder or thereunder, embodies the entire agreement of the parties and supersedes all prior agreements and understandings relating

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to the subject matter hereof. Delivery of an executed signature page of this Agreement by facsimile transmission or other electronic imaging means shall be as effective as delivery of a manually executed counterpart hereof. A set of the copies of this Agreement signed by all parties shall be lodged with the Borrower and the Administrative Agent.

Section 11.18 Confidentiality

Each of the Administrative Agent, the Lenders and the Issuers agrees to maintain the confidentiality of the Information, except that Information may be disclosed (i) to its Affiliates and to its and its Affiliates’ respective Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (ii) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (iii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (iv) to any other party hereto, (v) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (vi) subject to an agreement containing provisions substantially the same as those of this Section, to (A) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement, (B) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations or (C) any Special Purpose Vehicle that is a grantee of any option described in Section 11.2(g) (Assignments and Participations) or to any pledgee referred to in Section 11.2(f) (Certain Pledges) or 11.2(g) (Assignments and Participations), (vii) with the consent of the Borrower or (viii) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section 11.18 or (y) becomes available to the Administrative Agent, any Lender, any Issuer or any of their respective Affiliates on a nonconfidential basis from a source other than the New Borrower and its Subsidiaries. Any Person required to maintain the confidentiality of Information as provided in this Section 11.18 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information. Each of the Administrative Agent, the Lenders and the Issuers acknowledges that (a) the Information may include material non-public information concerning the New Borrower or its Subsidiaries, as the case may be and (b) it has developed compliance procedures regarding the use of material non-public information.

Section 11.19 Judgment Currency

(a) If, for the purposes of obtaining or enforcing any judgment or award in any court, or for making or filing a claim or proof, it is necessary to convert a sum due hereunder in any currency (the “Original Currency”) into another currency (the “Other Currency”), the parties hereto agree, to the fullest extent permitted by law, that the rate of exchange used shall be that at which, in accordance with normal banking

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procedures, Administrative Agent could purchase the Original Currency with such Other Currency in New York, New York on the Business Day immediately preceding the day on which any such judgment, or any relevant part thereof, is given.

(b) The obligations of the Borrower in respect of any sum due from it to any Agent or Lender hereunder shall, notwithstanding any judgment or award in such Other Currency, be discharged only to the extent that on the Business Day following receipt by such Agent or Lender of any sum adjudged to be so due in such Other Currency such Agent or Lender may in accordance with normal banking procedures purchase the Original Currency with such Other Currency; if the Original Currency so purchased is less than the sum originally due such Agent or Lender in the Original Currency, the Borrower agrees, as a separate obligation and notwithstanding any such judgment, to indemnify such Agent or Lender against such loss, and if the Original Currency so purchased exceeds the sum originally due to such Agent or Lender in the Original Currency, such Agent or Lender shall remit such excess to the Borrower.

Section 11.20 Severability

If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Without limiting the foregoing provisions of this Section 11.20, if and to the extent that the enforceability of any provisions in this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith by the Administrative Agent, any Issuer or the Swing Loan Lender, as applicable, then such provisions shall be deemed to be in effect only to the extent not so limited.

Section 11.21 Assumption of New Borrower

(a) The New Borrower hereby expressly confirms that, effective immediately after the effective time of the Spin and thereafter, it assumes, and hereby agrees to perform and observe and be bound by, each and every one of the covenants, promises, agreements, terms, obligations, duties and liabilities of (i) the Borrower under this Agreement and each other Loan Document applicable to it as the Borrower and (ii) a Grantor (as defined in the Pledge and Security Agreement) under the Pledge and Security Agreement. By virtue of the foregoing, immediately after the effective time of the Spin and thereafter, the New Borrower hereby accepts and assumes all liability of the Initial Borrower related to each representation, warranty, covenant or obligation made by the Borrower in this Agreement or any other Loan Document.

(b) Immediately after the effective time of the Spin and thereafter, all references to the term “Borrower” in this Agreement or in any other Loan Document or

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in any document or instrument executed and delivered or furnished, or to be executed and delivered or furnished, in connection therewith shall be deemed to be a reference to, and shall include, the New Borrower.

(c) Immediately after the effective time of the Spin and thereafter, all references to the term “Grantor” in the Security Agreement or in any document or instrument executed and delivered or furnished, or to be executed and delivered or furnished, in connection therewith shall be deemed to be a reference to, and shall include, the New Borrower.

(d) Immediately after the effective time of the Spin, the Initial Borrower shall become a Guarantor and hereby expressly confirms that, immediately after the effective time of the Spin and thereafter, it assumes, and hereby agrees to perform and observe and be bound by, each and every one of the covenants, promises, agreements, terms, obligations, duties and liabilities of a Guarantor under the Pledge and Security Agreement.

(e) Substantially simultaneously with, and in no event later than five Business Days (or such longer period of time permitted by the Administrative Agent in its sole discretion) after, the effectiveness of the Spin in accordance with the provisions of this Agreement, the New Borrower shall become the Borrower hereunder, the Initial Borrower and each Wholly-Owned Subsidiary of the New Borrower that has satisfied the Threshold Amount and is not a Restricted Subsidiary or already a Guarantor shall become Guarantors and shall: (i) deliver to the Administrative Agent (A) a joinder agreement in form and substance reasonably satisfactory to the Administrative Agent executed and delivered by the New Borrower, the Initial Borrower and the Administrative Agent with respect to the New Borrower becoming the Borrower hereunder, (B) a joinder agreement in form and substance reasonably satisfactory to the Administrative Agent executed and delivered by the Initial Borrower and each Wholly-Owned Subsidiary of the New Borrower that has satisfied the Threshold Amount and is not a Restricted Subsidiary or already a Guarantor, and the Administrative Agent with respect to such Persons becoming Guarantors; and (C) a reaffirmation agreement from each Guarantor reaffirming such Person’s obligations under the Loan Documents to which it is a party and (ii) deliver to the Administrative Agent documents of the types referred to in Section 7.11 (Additional Collateral and Guaranties) and, without the request of the Administrative Agent, legal opinions related the New Borrower in form and substance, and from counsel, reasonably acceptable to the Administrative Agent.

[Remainder of this page intentionally left blank]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.


J. RAY MCDERMOTT, S.A.

By:		/s/ James C. Lewis
Name:		James C. Lewis
Title:		Treasurer


MCDERMOTT INTERNATIONAL, INC.

By:		/s/ James C. Lewis
Name:		James C. Lewis
Title:		Treasurer